The Federal Government has approved an amendment to the excise duty rates for alcoholic beverages and tobacco products.
The approval, according to the Minister of Finance, Mrs. Kemi Adeosun, was given by President Muhammadu Buhari, and would take effect from Monday, June 4, 2018.
Adeosun, in a statement issued on Sunday in Abuja, said the President had also granted a grace period of 90 days (three months) to all local manufacturers before the commencement of the new excise duty regime.
However, she stated that there would be no increase in excise duty of other locally produced goods.
Adeosun stated that the new excise duty rates were spread over a three-year period from 2018 to 2020 in order to moderate the impact on prices of the products.
Under the newly approved excise duty rates for tobacco in addition to the 20 per cent ad-valorem rate, each stick of cigarette will attract 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.
The minister explained that Nigeria’s cumulative specific excise duty rate for tobacco was 23.2 per cent of the price of the most sold brand, as against 38.14 per cent in Algeria, 36.52 per cent in South Africa and 30 per cent in The Gambia.
The new specific excise duty rate for alcoholic beverages cuts across beer and stout, wines and spirits for the three years covering 2018 to 2020.