Excise Duty Rate on Alcoholic Beverages to Take Effect Monday

Enterprise Television- Excise Duty Rate on Alcoholic Beverages to Take Effect Monday

The Minister of Finance, Mrs. Kemi Adeosun, disclosed that President Muhammadu Buhari’s approved duty rate in March on alcoholic beverages and tobacco consumers to pay more for the products will take effect from today (Monday).

The excise duty rate for alcoholic beverages cuts across beer and stout, wines and spirits for the period 2018 to 2020.

She explained that 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.

Adeosun had stated in March that the President had granted a grace period of 90 days to all manufacturers before the commencement of the new excise duty regime in that sector of the economy. The grace period ended on Sunday.

She noted that the new excise duty regime followed all-inclusive stakeholder engagements by the Tariff Technical Committee of the Federal Ministry of Finance with key industry stakeholders.

According to her, 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.

She said, “The Tariff Technical Committee 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’s Technical Assistance Mission on Nigeria’s fiscal policy.

She revealed that this would curb the discretion in the unit cost analysis for determining the ad-valorem rate and prevent revenue leakages.

Regarding tobacco, she noted that the government would maintain the current ad-valorem rate of 20 per cent.

Under the newly approved excise duty rates for tobacco, she said in addition to the 20 per cent ad-valorem rate, each stick of cigarette would attract a N1 specific rate (N20 per pack of 20 sticks) in 2018; a N2 specific rate per stick (N40 per pack of 20 sticks) in 2019 and a N2.90k specific rate per stick (N58 per pack of 20 sticks) in 2020.

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

 

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