Tobacco Products

New tax regime on cigarettes, others effective from June 1 in Nigeria ─Official

*The Federal Ministry of Finance states the tobacco industry is a powerful one, assuring stakeholders that the Ministry is committed to checkmating ‘illicit flow’ of the product into the Nigerian market

*Tobacco has a devastating effect on the health of Nigerians… it should be well taxed as a luxury good, says CISLAC

Isola Moses | ConsumerConnect

In line with its earlier projection on enhanced revenue mobilisation while curbing illegal product imports into the economy, the Federal Government has announced that the new tax regime of initial N4.20 Kobo on tobacco will be implemented from June 1, 2022.

Fatima Hayatu, Director of Technical Services, Federal Ministry of Finance, Budget and National Planning, Abuja, FCT, stated this development during a meeting with the Civil Society Legislative Advocacy Centre (CISLAC), report said.

Mrs. Zainab Ahmed, Honourable Minister for Finance, Budget and National Planning

Okeke Anya, Programme Manager on Democratic Governance, was said to have led the organisation’s Tobacco Taxation Working Group.

Hayatu called the tobacco industry a powerful one, while assuring that the Ministry is committed to checkmating illicit flow of the product into the market.

The Ministry’s Director of Technical Services also hinted at the plans to engage relevant stakeholders to implement a robust track and trace system.

The Government is set to constitute a tobacco tax working group to study what other ECOWAS countries are doing.

She further noted the taxation on a stick of cigarette was N2.90kobo, but has now increased to N4.20kobo.

This followed ECOWAS recommendation of 0.02 Cents per stick of cigarette which, at the current exchange rate, would give N8.40kobo.

“However, it was agreed to meet the recommendation half-way which would give N4.20kobo starting from 2022.

“Then, in 2023, and additional 50kobo would be added to make N4.70kobo then in 2024, 50kobo would be added to make it N5.20kobo,” Hayatu stated.

She also said: “These will all reflect the current increase of the Ad Valorem from 20% to 30%. This is a gradual increase in the tax, and all is currently in review.

“The increase in tax/levies will not only be for tobacco products, but for others such as shisha, similar classification, the apparatus used to convey and consume them.

“Shisha will also be taxed by N3,000 per liter, N1,000 per Kg and it will be increased by N500 yearly.”

Anya, in his remarks at the forum, urged the Federal Government to include shisha pots and other electric smoking devices in the new tobacco tax regime.

The CISLAC official said this would crash their demand and increase revenue for the country.

“Tobacco has a devastating effect on the health of Nigerians,” adding that it should be well taxed as a luxury good.

He stated: “The increase in tax will be an avenue to generate revenue. This is how many countries operate because consumption of tobacco is a luxury and not a necessity.”

Anya as well emphasised that Nigerians would like to know the tobacco products that have paid the right tax duties and where they come.

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