President Muhammadu Buhari has endorsed an adjustment to the excise duty rates for alcoholic beverages and tobacco with effect from June 4, 2018.
In Abuja on Sunday, the Minister of Finance, Kemi Adeosun in a statement said the new excise duty rates will fall behind a three-year period from 2018 to 2020 in order to middling the impact on prices of products.
The new excise duty establishment followed all-inclusive stakeholder engagements by the Tariff Technical Committee of the Federal Ministry of Finance with key industry stakeholders.
According to her, the main review of the excise duty rates for alcoholic beverages and tobacco is to attain a dual benefit of raising the government’s fiscal revenues and minimizing the health hazards corresponding to tobacco-related diseases and alcohol abuse.
In her words, the Tariff Technical Committee (TCC) commend the slight adjustment in the excise duty charges after careful considerations of the Government’s Fiscal Policy Measures for 2018 with the reports of the World Bank and the International Monetary Fund Technical Assistance Mission on Nigeria’s Fiscal Policy.
The Federal Ministry of Trade and Investment also assessed the effect of the excise duty rates adjustment on trade and investment and approve the recommendations of the TTC.
Comparisons with pry country were also carted out indicating Nigeria as being behind the curve in the review of excise duty rates on alcoholic beverages and tobacco.”
Mrs Adeosun, after the president’s approval, said the new excise duty rate on tobacco was now an incorporation of the existing ad-valorem base rate and specific rate while the ad-valorem rate was substituted with a specific rate for alcoholic beverages.
The current ad-valorem rate will be replaced with specific rates and spread over three years to amount the impact on prices for alcoholic beverages,” she said.
This will ruin the subtlety in the Unit Cost Analysis (UCA) to ascertain the ad-valorem rate and impede revenue leakages.