Why Nigeria Hiked Tariffs On Alcoholic Drinks, Tobacco

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The Nigerian government has approved an amendment to the excise duty rates for alcoholic beverages and tobacco with effect from Monday, 4th June 2018, to reduce health hazards.
The government said the upward review of the excise duty rates for alcoholic beverages and tobacco was to achieve a dual benefit of raising the Government’s fiscal revenues and reducing the health hazards associated with tobacco-related diseases and alcohol abuse.

In December 2016, the federal government raised duties on luxury goods and beverages imported into the country under the Economic Community of West Africa’s (ECOWAS) Common External Tariff (CET) regime.

The increase was 10 to 70 percent the value of imported yatchs, luxury automobiles such as SUVs, boats, alcoholic beverages.

Other affected items include medicaments such as anti-malarials and antibiotics; crude palm oil; wheat flour; tomatoes paste; and cassava products among others.

Nigeria’s minister of finance, Kemi Adeosun, in a statement released on Sunday, March 11, 2017, in Abuja, said President Muhammadu Buhari also granted a grace period of 90 days (three months) to all manufacturers before the commencement of the new excise duty regime.

She said there is, however, no increase in excise duty of other locally excisable products.

“The new excise duty rates were spread over a three-year period from 2018 to 2020 in order to moderate the impact on prices of the products,” Oluyinka Akintunde, media aide to the minister said in the statement.

The minister disclosed that the new excise duty regimes followed all-inclusive stakeholder engagements by the Tariff Technical Committee of the Federal Ministry of Finance with key industry stakeholders.

She said, “The Tariff Technical Committee (TCC) recommended the slight adjustment in the excise duty charges after cautious considerations of the Government’s Fiscal Policy Measures for 2018 and the reports of the World Bank and the International Monetary Fund (IMF) Technical Assistance Mission on Nigeria’s Fiscal Policy.

“The effect of the excise duty rates adjustment on trade and investment was also assessed by the Federal Ministry of Trade and Investment and it adopted the recommendations of the TTC.

“Furthermore, peer country comparisons were also carried out showing Nigeria as being behind the curve in the review of excise duty rates on alcoholic beverages and tobacco.”

A governor in the Northern part of the country, Nasir El-Rufai had raised alarm over abuse use of drugs among youths, women and traditional rulers in the Kaduna state.

In Nigeria, the youths now mixed alcoholic drinks with various drugs to boost energy and manpower, a situation which the Nigerian hip-hop artist, Olamide Adedeji, described as “science student”, in his latest album.

The governor had raised an alarm over the disturbing rate of drug and substance abuse in the Northern region of the country, even as the Nigerian Senate decried that over three million bottles of codeine syrup were consumed daily in Kano and Jigawa states as at 2017.

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