Alcohol drinkers in Nigeria may have to pay extra to enjoy their favourite brands as Kemi Adeosun, minister of finance, is proposing increased tariff for alcohol and cigarette.
Adeosun’s proposal is in line with the implementation of the ECOWAS common external tariff (CET), which is aimed at strengthening a common market among member states as agreed upon on October 25, 2014.
The minister has submitted a memo to the Presidency suggesting that a two-part tariff is approved for tobacco products. A two-part imposes two types of import levies on the same item.
The memo suggested that a specific tariff of 35 kobo per CL be placed on beer and stout, N1.50k per CL on wines, and N2 on spirits and other alcoholic beverages.
For cigarettes, Adeosun suggested a 20 percent “ad valorem” tariff and a specific tariff of N1 per stick be placed on cigarettes and tobacco products. Ad valorem tariff is levied as a fixed percentage of the value of a commodity.
According to the minister, the proposed tariff increase is a recommendation made by the Tariff Technical Committee (TTC), which is chaired by the ministry of finance with members from ministries of industry, agriculture, Central Bank of Nigeria, Federal Inland Revenue Service, Office of the Secretary to the Government and Manufacturers Association of Nigeria.
“Further to the request, the chief of staff to Mr. President requested for my views on the matter. As a result of this, the TTC deliberated on the subject and recommended for an upward review of excise rate on tobacco and alcohol, taking into consideration their health implications and revenue potentials,” she wrote.
“In addition, it also recommended the introduction of a specific rate of excise on alcohol including beers and a mixture of ad valorem and specific rate excise structure on tobacco products in ECOWAS member states.
“In line with the recommendations of the TTC, I wrote and requested Your Excellency’s consideration and approval for the proposed revised rates of excise on alcohol and tobacco, vide letters: FMF/OHMF/TA/1/2017, dated 30th October 2017 and FMF/PHMF/ALCOHOL/1/2017, dated 8th November 2017.”
In November, Adeosun told the ECOWAS financial council of ministers that the federal government was working on policies to increase taxes on tobacco and alcohol.