From Monday, June 4, 2018 new tariffs for alcoholic beverages and tobacco products will come into effect in Nigeria. President Muhammadu Buhari, who approved the tariffs, stated that the upward review of the excise duty rates for alcoholic beverages and tobacco is to achieve a dual benefit of raising government’s fiscal revenues and reducing the health hazards associated with tobacco-related diseases and alcohol abuse.
Under the newly approved excise duty rates for tobacco in addition to the 20 per cent ad-valorem rate, each stick of cigarette will attract N1 specific rate [N20 per pack of 20 sticks] in 2018, N2 specific rate per stick [N40 per pack of 20 sticks] in 2019 and N2.90k specific rate per stick [N58 per pack of 20 sticks] in 2020.
Minister of Finance, Mrs. Kemi Adeosun, who announced the President’s approval, said the new specific excise duty rate for alcoholic beverages cuts across beer and stout, wines and spirits for the three years covering 2018 to 2020. Under the new regime, beer and stout will attract N0.30k per centilitre in 2018 and N0.35k per centilitre in 2019 and 2020. Wines will attract N1.25k per centilitre in 2018 and N1.50k per centilitre in 2019 and 2020, while N1.50k per centilitre has been approved for spirits in 2018, N1.75k per centilitre in 2019 and N2.00k per centilitre in 2020.
The federal government said the new tariff regime followed all-inclusive stakeholder engagements by the Tariff Technical Committee of the Federal Ministry of Finance with key industry stakeholders and is in line with the Economic Community of West African States’ directive on the harmonisation of member-states’ legislation on excise duties.
We commend the effort of the federal government for the concern on the health hazard of cigarette smoking which increases risk for death from all causes in men and women and causes about 80% (or 8 out of 10) of all deaths from chronic obstructive pulmonary disease.
Cigarette smoking harms nearly every organ of the body, causes many diseases and reduces the health of smokers in general. Thus, quitting smoking lowers the risk for smoke-related diseases and can add years to life. Alcohol on the other hand, when consumed excessively, can take a serious toll on health as it interferes with the brain’s communication pathways and can affect the way the brain looks and works. These disruptions can damage the heart, causing problems including stretching and drooping of heart muscle, irregular heartbeat, stroke, and high blood pressure.
Though the labour unions have kicked against government’s move saying the new tariff would impact on the cost of production, thereby creating job losses and an increase on the part of consumers who would have to pay more for cigarettes, alcoholic beverages and others, we urge that regulation must continue because it is government’s social responsibility. Any savings made in harmful products’ prices will be more than offset by rising healthcare costs.
Government should therefore collaborate with industry stakeholders such as National Agency for Food and Drug Administration and Control (NAFDAC), food, beverage and tobacco employees, and Manufacturers Association of Nigeria (MAN) on the issue of a proper tax regime for tobacco and alcohol.
Daily Trust
