New Tax Regime Aims to Protect Local Manufacturers of Tobacco, Alcohol–FG
By Dipo Olowookere
Federal government has explained that the new excise duty rates on alcoholic beverages and tobacco were never targeted at local manufacturers.
The Ministry of Finance, which released a statement at the weekend on the matter, said instead, the new rates, approved by President Muhammadu Buhari, was mainly to encourage local production and protect local manufacturing industry.
The statement, issued on Sunday in Abuja by the Director of Information at the Ministry, Mr Hassan Dodo, explained that apart from that, the new tax regime was also aimed to raise revenue for government to support the nation’s growth and reduce the health hazards associated with tobacco-related diseases and alcohol abuse.
Mr Dodo noted that before the new regime kicked off on Monday, June 4, 2018, stakeholders in the industry, including the Manufacturers Association of Nigeria (MAN), were consulted by the Tariff Technical Committee (TTC) for their inputs.
He said federal government remains committed to the industrialisation agenda and will continue to put in place fiscal policy measures to protect local manufacturers and stimulate the growth of the economy.
“The attention of the Federal Ministry of Finance has been drawn to media reports that the new excise duty rates approved by President Muhammadu Buhari on alcoholic beverages and tobacco were targeted at local manufacturers.
“The new excise regime seeks to achieve a dual benefit of raising government’s revenues to support the nation’s growth and reduce health hazards associated with tobacco-related diseases and alcohol abuse.
“The Ministry wishes to unequivocally state that the new excise duty rates which came into effect from Monday, June 4, 2018, were not targeted at the local manufacturers.
“Contrary to claims that the rates were selectively imposed on local manufacturers, there is currently a 60 percent duty rate imposed on imported alcoholic beverages and tobacco as part of measures by the government to encourage local production and protect local manufacturing industry.
“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 statement said.