The Federal Ministry of Finance came out on Sunday to defend its newly enacted excise duty rates on alcohol and tobacco, saying that they are not targeted at local manufacturers.
In a statement released by the ministry’s Director of Information, Hassan Dodo, it said that contrary to claims in some quarters, the new excise duty rates, which came into effect from June 4, 2018, were not targeted at local manufacturers.
The statement further said that the new excise regime sought to achieve the dual benefit of raising government’s revenue to support the nation’s growth.
The policy is also targeted at reducing the health hazards associated with tobacco-related diseases and alcohol abuse, according to the ministry.
“Contrary to claims that the rates were selectively imposed on local manufacturers, there is currently a 60% duty rate imposed on imported alcoholic beverages and tobacco as part of measures by the government to encourage local production and protect local manufacturing industries.
“It should also be noted that beer and stout are currently under import prohibition to protect the industry from unfair competition from foreign brands.
“In addition, other locally excisable products such as non-alcoholic beverages, cosmetics, perfumes, corrugated papers or paper boards and cartons have no excise duties.”
The ministry also took issue with claims that stakeholders were not consulted before the new rates were approved by the Federal Government.
He explained that the new excise duty rates followed all protocols of engagement with key stakeholders by the Tariff Technical Committee of which the Manufacturers Association of Nigeria was a member.
“The stakeholders’ engagements contributed to the final recommendation,” the statement noted.
The statement further stated that the Federal Government was committed to the industrialisation agenda for the economy, adding that it would continue to put in place fiscal policy measures to protect local manufacturers and stimulate the growth of the economy.
Under the new excise duty rates, the government said in addition to the 20% ad-valorem rate, each stick of cigarette would attract a N1 specific rate (N20 per pack of 20 sticks) in 2018; N2 specific rate per stick (N40 per pack of 20 sticks) in 2019 and N2.90k specific rate per stick (N58 per pack of 20 sticks) in 2020.
For beer and stout, the government said these would attract 30 kobo per centilitre in 2018 and N0.35k per centilitre each in 2019 and 2020.
Wines will attract N1.25k per centilitre in 2018 and N1.50k per centilitre each in 2019 and 2020.
For spirits, the government said it will attract N1.50k per centilitre in 2018; N1.75k per centilitre in 2019; and N2 per centilitre in 2020.