N600bn annual duties tobacco and alcohol untapped, says World Bank

By Nduka Chiejina, Abuja

Nigeria can generate N600 billion annually if she increases excise duties on tobacco and alcohol, says the World Bank.

The World Bank stated that excise on tobacco and alcohol, do not impact the vast majority of people and compliance can be monitored much more easily by the compliance agencies.

The bank has also advised the federal government to come up with tax policies that do not endanger investments, jobs or the growth of the economy.

These were contained in the World Bank’s National Development Update report on domestic revenue mobilisation released yesterday in Abuja.

Rajul Awasthi Senior Tax Specialist at the World Bank said Nigeria has one of the lowest excise duty rate on tobacco and alcohol in Africa.

“If the measures outlined in our report are implemented, these excise duty on tobacco and alcohol can raise more that N600 billion a year,” Awasthi said.

To boost domestic revenue from tobacco and alcohol, the World Bank tax specialist advised the federal government to adopt the excise standards for tobacco and alcohol recommended by the ECOWAS or Kenya to boost the country’s revenue from tax.

Awasthi lamented that Nigeria’s duty rate on cigarettes is lower than the standard set by the Economic Community of West African States (ECOWAS).

According to him, what is more important is that this two sources will not impinge on consumption growth, in fact these harm goods, so taxing them is actually good from the health perspective.

Adopting both ECOWAS and Kenyan standards he insisted will significantly boost the country’s revenue.