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ERA praise for FG over new excise duty on tobacco
The Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN), a nonprofit organization, has commended the Federal Government on the increase of excise duty on tobacco products in the newly- approved amendment of excise duty rates on tobacco and alcohol.
Under the new dispensation, in addition to the existing 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.
Kemi Adeosun, Minister of Finance, said the approval was given by President Muhammadu Buhari, and would take effect from Monday, June 4, 2018 after a 90-day (three months) grace period to all local manufacturers before the commencement of the new excise duty regime.
Adeosun said the review of the excise duty rates for tobacco and alcohol was necessitated by the need to raise the government’s fiscal revenues and reduce the health hazards associated with tobacco-related diseases and alcohol abuse.
When implemented Nigeria’s cumulative specific excise duty rate for tobacco is 23.2 per cent of the price of the most sold brand, lower than what operates in Algeria, South Africa and The Gambia which have 38.14 per cent, 36.52 per and 30 per cent respectively.
Although ERA/FoEN described the decision to increase excise duty on tobacco as praise-worthy, it urged the government to match the rates in Nigeria with that of other countries across Africa if the aims are to be achieved in record time.
Akinbode Oluwafemi, ERA/FoEN Deputy Executive Director, said: “We applaud the Federal Government for acceding to the popular wishes of Nigerians for tobacco products to be priced beyond the reach of our kids and the poor who are unfortunately targeted by the tobacco industry through their cheap but lethal products.”
Oluwafemi noted that while the rates are a good start, they still fall short of the more aggressive but very effective recommendations of the World Health Organization (WHO) in Article 6 of the Framework Convention on Tobacco Control (FCTC) which is 70% excise on tobacco products.
He highlighted the fact that survey after survey, including the Africa Tobacco Control Alliance Single Sticks Report and the Big Tobacco Tiny Targets Nigeria Report released last year, exposed the tobacco industry as targeting kids through the situation of points of sale near schools and other strategic locations they frequent to attract them to smoking.
“Considering the looming tobacco menace in Nigeria, it is necessary to take stringent measures to halt the deliberate marketing of tobacco products to kids. The new excise duty on tobacco products is a good start but the government can certainly do more,” Oluwafemi said.
“One more thing government can do is to recoup all previously unpaid taxes, tax waivers and tax grants that tobacco companies have illegally benefited under previous governments.”