The new excise duty for alcoholic beverages and tobacco earlier approved by President Muhammadu Buhari will take effect from Monday , June 4 , 2018 , says the Federal Government .
The News Agency of Nigeria recalls on Sunday that the Minister of Finance, Mrs . Kemi Adeosun , in March announced that the President had granted a grace period of 90 days to manufacturers of the products .
Adeosun said the new excise duty rates would spread over a three- year period from 2018 to 2020 in order to moderate the impact on prices of the products .
According to her , the upward review of the excise duty rates for alcoholic beverages and tobacco was to raise the government ’ s fiscal revenues .
She said that it would also reduce the health hazards associated with tobacco – related diseases and alcohol abuse .
Adeosun said the new 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 .
She said that under the new rates for tobacco , in addition to the 20 per cent ad – valorem rate, each stick of cigarette will attract one naira specific rate per stick ; that is N 20 per pack of 20 sticks in 2018 .
She said that in 2019, tobacco will attract two naira specific rate per stick or N 40 per pack of 20 sticks .
The minister said that by 2020 , tobacco would begin to attract N 2.90 kobo specific rate per stick or N 58 per pack of 20 sticks .
Adeosun explained that Nigeria ’ s cumulative specific excise duty rate for tobacco was 23.2 percent of the price of the most sold brand.
This is against the 38.14 percent in Algeria , 36. 52 percent in South Africa and 30 percent in Gambia .
She said also that the new specific excise duty rate for alcoholic beverages cuts across beer and stout , wines and spirits for the three years, 2018 to 2020.
Under the new regime, beer and stout will attract 0 . 30k per centilitre (cl ) in 2018 and 0 . 35k per cl each in 2019 and 2020.
Wines will attract N 1.25k per cl in 2018 and N 1 . 50k per cl each in 2019 and 2020 , while N 1 . 50k per cl was approved for spirits in 2018 , N 1 . 75 k per cl in 2019 and N 2 per cl in 2020.
The Director- General , Consumer Protection Council , Mr. Babatunde Irukera , said the decision to increase the excise duty on these commodities was consistent with prevailing global practices .
He said he was convinced that government ’ s approach would foster consumer confidence , provide regulatory clarity and prioritise safety , to reinforce the mandate of the council.
The International Monetary Fund , in its 2017 mission , advised Nigeria to raise the excise duty on a stick of cigarette to N5, which is five times the approved amount.
“ The low tax level prevails even though Nigeria is the highest alcohol drinking country in Africa and leads the top 10 largest beer drinking countries , ” IMF said .
The new rates fall short of the more aggressive recommendations of the World Health Organisation in Article 6 of the Framework Convention on Tobacco Control , which suggests 70 per cent excise on tobacco products.