The Federal Government of Nigeria has concurred with a decision by the Economic Community of West African States (ECOWAS) to increase excise duties on tobacco and other unhealthy products to increase revenue and reduce consumption of such products in the sub-region.
The decision was part of the aims of the meeting of ECOWAS Financial Council of Ministers in Abuja on Friday.
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.
The Vice President of ECOWAS Commission, Edward Singhatey, said member states had begun work on draft directive to harmonise excise duties on tobacco products.
Mr. Singhatey added that the draft would include legislative and regulatory provisions of member states in tracking and tracing mechanisms related to tobacco products.
He said “this is to facilitate smooth running of the domestic market of tobacco products and 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.”
Reacting to the decision with approval, Kemi Adeosun, minister of finance, disclosed that the federal government is working on policies to increase excise tax on tobacco and alcohol.
She said: “Federal government identified with the ECOWAS position on excise tax on some products.”
“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.”
“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”.
“Nigeria supports the ECOWAS directives of VAT exemptions on basic food items in their raw states, medicaments and pharmaceutical products.”
Adeosun was represented by Mahmoud Dutse, permanent secretary of the ministry.