The Nigerian President, Muhammadu Buhari is set to increase the market prices of alcohol and cigarette in the country.
The latest development was made known by the Finance Minister, Kemi Adeosun who revealed that the President had approved a new excise rates on the products.
Kemi Adeosun while speaking on the latest development revealed that the review which has been signed by the President is aimed at increasing revenue and discourage the consumption of the items associated with health risks.
The increase which will take effect from June 4, 2018 will spread over a period of three years, between 2018 to 2020.
She added in the statement released to the effect:
“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. Furthermore, 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.
“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 per cent and introduce additional specific rates with the implementation to be spread over a three-year period to also reasonably reduce the impact on prices.”
The Finance Minister further revealed that each stick of tobacco cigarette will attract an additional N1 specific rate added to the excise duty rates for tobacco set at 20 per cent ad-valorem rate in 2018.
In 2019 however, each stick will attract N2 specific rate per stick and N2.90k specific rate per stick (N58 per pack of 20 sticks) in 2020.
Wines would attract N1.25k per Cl in 2018 and N1.50k per Cl each in 2019 and 2020.
For Spirits, each Cl will attract N1.50k in 2018, N1.75k per Cl in 2019 and N2.00k per Cl in 2020.