Excise duty rates on alcohol, cigarettes not targeted at local manufacturers
The Federal Ministry of Finance said the new excise duty rates on alcohol and cigarettes, which came into effect on June 4, was not targeted at destroying local manufacturers.
The Director of Information, Federal Ministry of Finance, Mr Hassan Dodo, in a statement on Sunday in Abuja stated that the purpose of introducing the new duty is to increase government’s revenue.
“Contrary to claims that the rates are selectively imposed on local manufacturers, there is currently a 60 per cent duty rate imposed on imported alcoholic beverages and tobacco.
“This is part of measures by the government to encourage local production and protect local manufacturers.
“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, ” he said.
The Distillers and Blenders Association of Nigeria (DIBAN) had earlier rejected the new ”astronomical increase” in excise duty being imposed on domestic wines and spirits.
The Chairman of DIBAN, Chief Patrick Anegbe told newsmen on Wednesday in Lagos, that the hike was a threat to the N420 billion investment of the industry.
Anegbe said that there was no prior engagement/consultation whatsoever with the indigenous producers of wines and spirits, before adopting the new excise method.
He said that the association was particularly worried that the job of over 25,000 Nigerians plus over 250,000 connected SMEs staff were being threatened by the hike.
Recall that President Muhammadu Buhari in March approved the increment of excise duties on alcohol and tobacco.
Under the new rates, excise duty for cigarette would be N20 per pack of 20 sticks in 2018, N40 per pack of 20 sticks in 2019 and N58 per pack of 20 sticks in 2020.
Beer and stout will attract 0.30k per centilitre (cl) in 2018 and 0.35k per centlitre each in 2019 and 2020.
Wines will attract N1.25k per cl in 2018 and N1.50k per cl each in 2019 and 2020.
In addition, N1.50k per cl was approved for spirits in 2018, N1.75k per cl in 2019 and N2 per cl in 2020