FG to double new tax rate on tobacco products in 2019 – Adewole
By Luminous Jannamike
ABUJA – BARELY 24hrs after the Federal Government began implementation of increased excise duty on tobacco and alcoholic products, it has said plans are underway to further double the new tax rates in 2019.
The Minister of Health, Professor Isaac Adewole, lamented at a press briefing in Abuja that Nigeria currently suffers a projected accumulated loss of $7.6bn annually to the tobacco industry.
He said the tobacco industry in Nigeria made huge profits without taking responsibility for the harm they do to public health.
According to him, evidence showed that for every $1 gained from tobacco business, the Federal Government expended about $3 on healthcare cost to the citizens, particularly patients of stroke, diabetes, and heart disease which are all linked to tobacco use.
Adewole said: “Tobacco products are very cheap in Nigeria. The FMOH with support from the National Tobacco Control Committee, Civil Society Organizations, and Tobacco Taxation Technical Working Group, had discussions with the Federal Ministry of Finance which resulted in the recent tax increase on tobacco products which has been approved by Mr. President.
“May I inform you that the new rate, which came into effect today, 4th June 2018, is a tax increase of N20 per pack of 20 sticks of cigarettes; this would be raised to N40 per pack in 2019 and subsequently, N58 per pack in 2020.
“Although the tax increase is below the ECOWAS tax directive of at least 50% ad valorem plus or USD 20 per net kilogramme for all other tobacco products, I believe Mr. President will lead ECOWAS in implementing this directive within a shortest possible time to move Nigeria near the WHO recommended tax increase that is equivalent to 70% of retail price of tobacco products.”
He however added that as taxes on tobacco were being raised, the Federal Government must prevent revenue leakages and curtail illicit trade in tobacco products which is the argument often put forward by the tobacco industry.