FG to increase taxes on tobacco, alcohol

Kemi Adeosun, minister of finance, says the federal government is working on policies to increase excise tax on tobacco and alcohol.

She said this while speaking at the ECOWAS financial council of ministers in Abuja on Friday.

Adeosun was represented by Mahmoud Dutse, permanent secretary of the ministry.

Edward Singhatey, ECOWAS vice president, said the commission would increase excise duties on tobacco and other unhealthy products to increase revenue and reduce consumption of such products in the sub-region.

Singhatey said this would ensure compliance with obligations of member states under the World Health Organisation framework convention on tobacco control and the protocol to eliminate illicit trade in tobacco products.

An excise duty is a type of tax charged on goods produced within the country, as opposed to customs duties, charged on goods from outside the country.

“Federal government identified with the ECOWAS position on excise tax on some products,” Adeosun said.

“One of the techniques used by governments all over the world is to tax products that are either consumed particularly when you want to do progressive taxation, or products that are hazardous to health and increase health spending.

“It is a twin objective; to raise revenue and decrease tobacco consumption. In this regard, the use of modern techniques and tools of production controls such as tax stamps or special package markings in the context of the track-and-trace system, which is a global best practice, are being considered.

“The harmonisation of laws establishing a system for tracing, tracking and tax verification of manufactured or imported tobacco products in ECOWAS member states is a welcome development for Nigeria.”

Adeosun said it was important for member states to put in place effective track-and-trace systems to eliminate illicit trade.

She said “without effective track-and-trace system, illicit trade will undermine trade and tax measures and will have serious adverse effects on public health in West Africa”.