Prices Of Cigarettes, Alcohol To Increase As Federal Government Increases Excise Duty

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Smokers and alcohol consumers have got some bad news- lighting up as President Muhammadu Buhari has approved an amendment to the excise duty rates for alcoholic beverages and tobacco with effect from June 4.

Finance Minister Kemi Adeosun broke the news yesterday in a statement by her media aide Oluyinka Akintunde.

She said the new excise duty rates were spread over a three-year period from 2018 to 2020 to moderate the impact on prices of the products adding that Buhari granted a grace period of 90 days to manufacturers.

She said the new excise duty regimes was decided at an all-inclusive stakeholder engagement by the Tariff Technical Committee of the Federal Ministry of Finance with key industry stakeholders.

Mrs Adeosun 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 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.

Also Read: ‘FG Has No Plan To Increase Fuel Price’ – Osinbajo

“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.”

Mrs.  Adeosun said the new excise duty rate on tobacco was a combination of the existing ad-valorem base rate and specific rate while the ad-valorem rate was replaced with a specific rate for alcoholic beverages.

“For alcoholic beverages, the current ad-valorem rate will be replaced with specific rates and spread over three years to moderate the impact on prices. This will curb the discretion in the Unit Cost Analysis (UCA) for determining the ad-valorem rate and prevent revenue leakages.

“For tobacco, the government will maintain the current ad-valorem rate of 20 percent and introduce additional specific rates with the implementation to be spread over a three-year period to also reasonably reduce the impact on prices,” she said.

Under the newly approved excise duty rates for tobacco in addition to the 20 percent ad-valorem rate, each stick of cigarette will attract a N1 specific rate per stick (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.

The minister explained that Nigeria’s cumulative specific excise duty rate for tobacco was 23.2 percent of the price of the most sold brand, as against 38.14 percent in Algeria, 36.52 percent in South Africa and 30 percent in the Gambia.

The new specific excise duty rate for alcoholic beverages cuts across Beer & Stout, Wines and Spirits for the three years 2018 to 2020.

Under the new regime, Beer & Stout would attract N0.30k per centiliter (Cl) in 2018 and N0.35k per Cl each in 2019 and 2020.

Wines will attract N1.25k per Cl in 2018 and N1.50k per Cl each in 2019 and 2020, while N1.50k per Cl was approved for Spirits in 2018, N1.75k per Cl in 2019 and N2.00k per Cl in 2020.

The post Prices Of Cigarettes, Alcohol To Increase As Federal Government Increases Excise Duty appeared first on LATEST NIGERIAN NEWS BREAKING HEADLINES NEWSPAPERS.

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