The House of Representatives, on Wednesday, mandated its Committee on Finance to carry out detailed investigation, with a view to increasing taxes currently levied on tobacco and alcoholic products “to match global standard.”
The resolution followed the unanimous adoption of a motion to that effect, sponsored by Sergius Ogun (PDP, Ogun).
Ogun, leading debate on the motion, recalled that President Muhamamdu Buhari had, on 5 March, 2018, directed the then Minister of Finance, Kemi Adeosun, to review the excise duty rate of tobacco and alcoholic products, “with 20 per cent ad valorem rate on unit cost of production, beginning 4 June, 2018.”
The lawmaker argued that such increase would not only curb tobacco use, and channel the proceeds into the funding of healthcare services, but also augment government’s revenue substantially.
“Nigeria’s current policy to increase the excise duty rate on tobacco between 30-35 per cent in 2020, falls below the 75 per cent global best practice recommended by the World Health Organization (WHO).
“Whereas the new policy to be implemented over a 3-year period is expected to decrease the industry revenue by 3.3 per cent of N98.7 billion, data shows that sister African countries impose higher excise duty rate on unit cost of tobacco than Nigeria,” Ogun said.
He decried the non-implementation of the new tobacco taxes despite the expiration on 4 September, 2018, of the 90-day extension period granted to manufacturers by President Buhari.
In their separate contributions, the lawmakers agreed on the public health benefits of reduced tobacco use, such as increased productivity from a healthier population, and the allocation of tobacco taxes to other sectors of the economy.
They, however, emphasized the need for an institutional, legislative frameworks to implement the new tax policy on tobacco and alcoholic beverages.
