The Federal Government has clarified that the new duty rates placed on alcoholic beverages and tobacco was purposely to reduce health hazard related on their consumptions and not a target at local manufacturers.
President Muhammadu Buhari had recently approved the new duty regime, which reviewed upward rates paid to the government for alcoholic beverages and tobacco products.
The regime, which took off on June 4, 2018, however, raised attentions after some media reports insinuated that the increase in the duty rates were targeted at local manufacturers.
But dismissing the reports, the Ministry of Finance in a statement signed by its Director of Information, Hassan Dodo, insisted that the upward review of the duty rates were not targeted at local manufacturers but to benefits the country in two ways.
“The new excise regime seeks to achieve a dual benefit of raising the Government’s revenues to support the nation’s growth and reducing the health hazards associated with tobacco-related diseases and alcohol abuse.
“Contrary to claims that the rates were selectively imposed on local manufacturers, there is currently a 60 per cent 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,” Dodo said.
The Ministry noted that products such as non-alcoholic beverages, cosmetics, perfumes, corrugated papers or paper boards and cartons, which are locally excisable, have no excise duties, adding that it reached the decision on the new excise regime after engagements with key stakeholders.
“We wish to clarify that the approved excise duty rates followed all-encompassing engagements with key industry stakeholders by the Tariff Technical Committee (TTC), of which Manufacturers Association of Nigeria (MAN) is a member. The stakeholders’ engagements contributed to the final recommendation.
“The Federal Government remains committed to the industrialization agenda and shall continue to put in place fiscal policy measures to protect local manufacturers and stimulate the growth of the economy,” he noted.