The Nation Newspaper

Tag: Tobacco

  • CPC enforces ban on shisha, tobacco, others

    The Consumer Protection Council has begun an awareness campaign on the National Tobacco Control Act (NTCA) across major cities in Nigeria where cigarettes and shisha are openly sold. The agency’s officials, accompanied by police officers – visited the popular old Ojota motor park in Lagos and nearby garages, as well as some lounges and bars, to enforce the prohibition of shisha.

    Earlier, the agency had conducted the same exercise in Abuja and Port Harcourt accompanied by officers of the Nigeria Security and Civil Defence Corps (NSCDC). The Head, Surveillance and Enforcement Department, Federal Competition and Consumers Protection Commission (FCCPC), Lagos Office, Anyanwu Carmellus, pointed out that the council is mandated by law to enforce all enactments aimed at protecting consumers, like the NTCA, and mindful that tobacco products pose grave health risks to consumers, the agency resolved to enforce all the enforceable provisions of the Act.

    “However, we also considered it necessary to sensitise tobacco dealers and the public to the provisions of the law before we commence full enforcement,” he added.The National Tobacco Control Act (NTCA) 2015 regulates and controls the production, manufacture, sale, advertising, promotion and sponsorship of tobacco products in the country.

    The regulations according to him, included the prohibition of the sale of tobacco products to and by anyone below 18 years; ban of sale of cigarettes in single sticks, cigarettes must be sold in packs of 20 sticks only; smokeless tobacco shall be sold in a minimum of a pack of 30 grammes; ban of sale or offer for sale or distribution of tobacco or tobacco products through mail, internet, or other online devices.

    ‘The rest were the prohibition of interference of the tobacco industry in public health and related issues; prohibition of smoking in public places; prosecution of the manager of a public place who permits smoking; prohibition of tobacco advertising, promotion and sponsorship; and tobacco products’ compliance with the specified standard for content as set out by the Standards Organisation of Nigeria’.

     

  • Tobacco: Health Ministry, MAN tackle FG on N35m fine

    The Federal Ministry of Industry, Trade and Investment has kicked against a penalty clause in the draft National Tobacco Control Regulations.

    The bill was sponsored by the Federal government but the Industry, Trade and Investment Ministry was against a penalty of N35m for the issuance of license for tobacco or tobacco products businesses (manufacturers, importers and distributors) pursuant to Section 29 (1) and (2) of the NTC Act.

    The Manufacturers Association of Nigeria (MAN) also supported the Ministry in the rejection of the clause on the ground that the fine would be counter productive as it could lead to market contraction and loss of margin squeeze.

    This would naturally impact negatively on the volume of input purchased from farmers and eventually lead to disengagement of workers.

    The Simon Arabo-led Committee on Delegated Legislation organized an interactive session with stakeholders on Thursday the bill which is currently with the National Assembly.

    However, the Speaker of the House of Representatives, Yakubu Dogara, Minister of State for Health, Osagie Ehanire and Environmental Rights Action /Friends of the Earth (ERA/FoEN) threw their weight behind the bill.

    ERA/FoEN’s Deputy Executive Director, Akinbode Oluwafemi said it has become extremely important for Nigeria to pass the bill into law in order to curb the usage of cigarettes and several new tobacco products in the country.

    He maintained that the passage of the draft regulation represents a unique opportunity for Nigeria to give the needed impetus for the smooth enforcement of the National Tobacco Control Act 2015 (NTCA).

    Read Also; Approve draft National Tobacco Control Regulation, NASS urged

    While opposing the N35m penalty, the representative Ministry of Trade, Francis Alaneme said, “This stringent measure will eventually lead to job loses and possible relocation of affected companies to neighbouring African countries as was the case with Dunlop and Michelin.

    “The massive job loses and social backlashes occasioned by the pull out of these manufacturing companies from Nigeria to Ghana and other neighbouring countries was as a result of unfriendly policies and harsh business environment.”

    MAN expressed same concern with emphasis on the fate of field workers if the bill is passed into law with the clause

    The Health Minister however, justified the licensing of tobacco dealers, noting that it is global best practice to take that path because of the wider positive effects on the society

    He said: “Licensing is an important strategy to control the supply chain of

  • Still on effective regulation of tobacco products

    Akeem Ogunlade in a recent article simply powdered trite arguments of the tobacco industry that an effective control policy will actually harm the economy and as such, what Nigeria really needs is the industry promoted – “Sensible Regulation,” “Balanced Regulation” which he colourfully explains away as “prudent regulation”.

    He goes on to describe tobacco control as controversial. Ironically, it is not. It is in fact, the tobacco industry that creates this perception so that it can manipulate issues and stay in business.

    Tobacco is lethal. It kills. It harms public health and ruins a nation’s efforts towards sustainable development. Tobacco currently kills more than seven million people each year. More than six million of these deaths are those who use tobacco directly, while another 890,000 die from exposure to second-hand smoke.

    Worried by the rising deaths from tobacco use, the World Health Organisation (WHO) initiated the Framework Convention on Tobacco Control (FCTC) which was adopted by the 56th World Health Assembly in May 2003 as the first global public health treaty. Nigeria became party to this treaty in 2005.

    Nigeria domesticated the treaty through the National Tobacco Control Act, 2015 but the journey was a tortuous one which took almost ten years. Those years were fraught with scare-mongering by the tobacco industry and their many front groups hired to hype an alternate reality: that tobacco control would lead to job losses, shutdown of tobacco companies and a cutback on government revenue.

    But public health experts know that those faulty arguments only reinforce the WHO caution in Article 5.3 of the FCTC that there exists an irreconcilable conflict between tobacco industry interests and public health policies. Article 5. 3 of the FCTC,  which Ogunlade referenced in a deliberately skewed manner,  says that “in setting and implementing their public health policies with respect to tobacco control, parties shall act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law.”

    The ultimate goal of tobacco control is to save lives from tobacco addiction while tobacco manufacturing, distribution and retailing seek only to profit from harming the lives of consumers.  “Balanced Regulation”, “Sensible Regulation” or so-called “Prudent Regulation” as being promoted by the tobacco industry is that which diminishes the sanctity of life at the altar of corporate greed. It’s that kind of regulation that keeps the tobacco industry in their comfort zone, maintaining high record profits while our brothers and sisters wallow in disease and preventable deaths.

    Fact is, with the FCTC, nations around the world are unanimous that in the case of any conflict between the profits of tobacco companies and public health, public health should take precedence.

    The fairy tale argument on a link between high taxes and increase in tobacco smuggling and counterfeiting was brought to the fore again in Ogunlade’s piece. If not intended to deliberately confuse the public, the high tax and smuggling nexus is far from the truth. In fact, investigations show that on the contrary, the tobacco industry is actually behind smuggling of tobacco products.  It is established that taxes work to prevent youth initiation, reduce consumption rates while at the same time raise government revenue.

    Since the 1990s, incontrovertible evidence has shown that the tobacco industry has been actively involved in smuggling of tobacco products as a business strategy. This strategy is to saturate markets with products far exceeding what local populations can consume. The excess would ultimately be sold elsewhere and for the tobacco industry, it gets paid regardless of how and where the products are sold. In Canada, subsidiaries of Japan Tobacco and British America Tobacco (BAT), and a company partly owned by Philip Morris International (PMI) were found guilty of tobacco smuggling and collectively fined C$1.7 billion (£1 billion) over a ten-year period spanning 2000 to 2010 when the cases went to court.

    The Guardian of London, working with the International Consortium of Investigative Journalists in January 2000, published an investigation into BAT’s operations which included the facilitation of tobacco smuggling. 11,000 internal documents of the tobacco industry sieved through during the investigation exposed how BAT employees did not partake but condoned tax evasion and exploited the smuggling of billions of cigarettes in a global effort to boost sales and lure generations of new smokers. The target markets were in Canada, Latin America and Asia.

    Most disturbing was that the documents revealed that the smuggling “channels” which the company’s cigarettes travelled along were always operated and managed by others and it used euphemisms – including “duty not paid”, “general trade” and “transit” – to describe smuggling channels.

    Perhaps the most disturbing recommendation in Ogunlade’s article is his case for so-called “safe alternatives” to the conventional cigarettes which he described as products with “lesser risks”. We assume that he is referring to e-cigarettes and the controversial heat-not-burn products. He listed Canada, US and UK as countries where the regulatory approach to tobacco control is “progressive”. Whatever that means, this is far from the truth. The writer makes no mention of the recent US Food and Drug Administration (FDA) alarm that the number of teenagers using one of the suggested alternatives – e-cigarettes – in that country has surged by 75 percent, egged on by a boom in flavoured products. The FDA described e-cigarettes as a scourge in U.S. schools, with students often vaping in the bathrooms or between classes.

    A new study published in the Medical Journal of Australia, reveals that 60 percent of nicotine-free e-cigarettes sold contain pesticides and this is inhaled by smokers of the product. In Hong Kong, vapers are threatened with jail terms in the government’s plan to push ahead with a blanket ban on all e-cigarettes and heat-not-burn products.

    Whatever the intent of Ogunlade’s rhetoric is for advocating for more space for tobacco entities to manipulate tobacco control, it is anti-public health and anti-public good. What Nigeria needs at this moment is conscientious and stringent enforcement of provisions of the National Tobacco Control Act, 2015.

    As at today, Nigeria is not even near in ranking with other African countries like Ghana, Niger, Kenya, Ethiopia, Senegal, to mention a few, who have put in place effective tobacco control measures. Within the sphere of policy, government at all levels must act now in rejecting the ploy to make our nation a dumping ground for tobacco products.

    • By Oluchi Joy Robert,

    Environmental Rights Action/Friends of the Earth Nigeria,  Lagos.

     

     

     

  • Tobacco: Thanks to Consumer Protection Council

    The beginning of the enforcement of the National Tobacco Control (NTC) Act 2015 by the Consumer Protection Council (CPC) is a very welcome development. Penultimate week, the agency reportedly swooped on Wuse axis and Jabi Park in Abuja to warn retailers of cigarettes, that it would subsequently clamp down on sale of the product in sticks and to minors and prosecute anyone found violating the law.

    Aside cigarette retailers, event centres, bars and lounges where shisha otherwise known as water-pipe tobacco are sold, were also visited and the owners of the facilities warned that the product is illegal in Nigeria and must be off the shelf.

    The CPC action is coming nearly two years after the number one health officer in the land, Professor Isaac Adewole, Minister of Health, announced nine provisions of the NTC Act that would not require regulations for its enforcement. This means that agencies of government enforcing the law would not need the nod of the National Assembly and other bureaucracies to carry out enforcement.

    Aside the provision banning sale of cigarettes in sticks, others that do not require regulations are provisions that:

    Prohibit sale of tobacco products to and by anyone below 18 years

    Smokeless tobacco which shall be sold in a minimum of a pack of 30 grams

    A person shall not sell or offer to sell or distribute tobacco or tobacco products through mail, internet or other online devices

    Prohibition of interference of tobacco industry in public health and related issues

    Prohibition of smoking in public places.

    Ban owner or manager of any of the places listed, who permits, encourages or fails to stop smoking in the above listed places

    Ban on tobacco advertising, promotion and sponsorship of any kind

    For tobacco products to comply with specified standard for content as set out by the Standards Organisation of Nigeria (SON).

    The penalty for any of the violations includes fines and prison terms.

    With the CPC setting the pace with the Abuja raids, other agencies of government including the Nigeria Police and the Nigeria Security and Civil Defence Corps (NSCDC) are now challenged to take the gauntlet in view of the enormity of work at hand. The imperative of inter-governmental agency collaboration is even crucial since the police and the civil defence know most of the dark spots across the country where illicit drugs are openly or covertly sold.

    Raid on dark spots, in the mould of that, which the Lagos police carried out during the 2016 yuletide which led to the discovery and destruction of N50 million worth of dangerous substances, is welcome. The likelihood that unscrupulous politicians will exploit the election season to make cigarettes and other controlled substances readily available to incite hoodlums to mayhem is very rife judging by antecedents.

    Since the NTC Act is a national law, we expect the CPC to extend its raid to other of the country to send a clear message that the government is sincere in protecting the health of the citizenry no matter the part of the country they reside.

    The dangers posed by cigarettes in the hands of minors will lead to a health epidemic in no distant future. Minors are today exposed to cigarettes displayed openly in the shopping malls, open markets, schools and near schools, hotels and restaurants.

    If we hope to avoid this looming catastrophe linked to tobacco or the violence and other crimes that are associated with their use, the phrase “a stitch in time” is not an overstatement.

    • Hadiza Abdulmumini, Yola, Adamawa State.

  • Why operators are kicking against alcohol, tobacco tariff hike

    The upward review of the excise duty on alcohol and tobacco kicked off Monday. The government envisaged that the new rates, to be spread over a three-year period, will raise revenue and reduce health hazards from tobacco-related diseases and alcohol abuse. But local manufacturers are kicking, insisting that the policy will hurt investments and trigger massive job losses. They are pushing for its reversal to save the manufacturing industry, writes Assistant Editor CHIKODI OKEREOCHA.

    The new excise duty regimes on locally-produced alcoholic beverages and tobacco products, which kicked off last Monday may have set the stage for a major confrontation between the Federal Government and local manufacturers.

    Already, members of the Distillers and Blenders Association of Nigeria (DIBAN), a sectoral group of the Manufacturers Association of Nigeria (MAN), are literarily up in arms, calling on the Federal Government to halt the implementation of the hike and convene a forum with stakeholders in the wines and spirits market.

    DIBAN Chairman Patrick Anegbe said the implementation of the policy should be reversed to save over 25,000 jobs and over 250, 000 connected Small and Medium Enterprises (SMEs) workers.

    “Our industry investment of over N420 billion is being threatened by the recent upward review of excise duties on locally produced wines and spirits,” he said during a press conference organised by the group in Lagos.

    The Federal Government may have inadvertently drawn the battle line with local manufacturers particularly distillers when its upward review of excise duty on local alcohol and tobacco came into force. The implementation of the review came after a 90-day grace to local manufacturers.

    Under the new rates, approved in March by President Muhammadu Buhari, beer and stout will attract N0.30 per centilitre this year and N0.35 per centilitre in 2019 and 2020. Wine will attract N1.25 per centilitre in 2018 and N1.50 per next year and 2020. Also, N1.50 per centilitre was approved for spirits this year; N1.75 next year; and N2 in 2020.

    Similarly, 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) this year; N2 specific rate per stick (N40 per pack of 20 sticks) next year, and N2.90k specific rate per stick (N58 per pack of 20 sticks) in 2020.

    The excise duty hike on the products, according to Minister of Finance, Mrs. Kemi Adeosun, would be spread over a three-year period to moderate the impact on prices of the products.

    With the implementation of the new duty regime, it is envisaged that Nigeria’s cumulative specific excise duty rate for tobacco, for instance, will 0be 23.2 per cent of the price of the most sold brand, which is still lower than that of Algeria, South Africa and The Gambia, which have 38.14 per cent, 36.52 per cent and 30 per cent respectively.

    Mrs. Adeosun had in March said peer country comparisons carried out showed that the country was behind the curve in the review of excise duty rates on alcoholic beverages and tobacco.

    She said the Tariff Technical Committee (TCC) recommended the slight adjustment in the excise duty charges after cautious considerations of the government’s fiscal policy measures for the year and the reports of the World Bank and the International Monetary Fund (IMF) Technical Assistance Mission on Nigeria’s fiscal policy.

    The minster added that the effect of the excise duty rates adjustment on trade and investment was also assessed by the Federal Ministry of Trade and Investment, which adopted the recommendations of the TTC.

    She also said the new excise duty regimes were in line with the Economic Community of West African States (ECOWAS) directive on the harmonisation of member-states’ legislations on excise duties.

    The ECOWAS Council of Ministers had at its 62nd and 79th Ordinary Sessions in Abuja in May 2009 and December 2017, issued directives on the harmonisation of the ECOWAS Member-States’ Legislations on Excise Duties.

    The directives, The Nation learnt, sought to harmonise member-states’ legislations on excise duties on non-oil products and also stipulate the scope of application, rate of taxation, taxable event and amount.

    The overall objectives of the review of the excise duty rates for tobacco and alcohol, according to Mrs. Adeosun, were to raise government’s fiscal revenues and reduce the health hazards associated with tobacco-related diseases and alcohol abuse.

    But some experts, stakeholders and local manufacturers particularly distillers are not swayed. For instance, as far as Anegbe is concerned, the policy was a purely IMF-sponsored agenda camouflaged as a health concern. He said DIBAN, under the auspices of MAN, therefore, rejects what he described as “the new astronomical hike in excise duty being selectively imposed on the local spirits and wine industry”.

    According to Anegbe, the new duty on local wines and spirits translated to an increase of over 500 per cent, from the current average of N30 per litre to N150 per litre in the first year and N200 per litre subsequently. “This translates to an increase from current average duty of N270 to N1, 350 per case (carton) in the first year and N270 to N1, 800 per case (carton) from the second year,” he lamented.

     

    The fears, worries

    Anegbe expressed fears that if the implementation of the new duty is sustained, there will be massive job losses arising from low demand of local products. He also said it will lead to the collapse of the indigenous wines and spirits segment and pave way for the complete takeover of the market by imported and smuggled brands.

    Besides, the spillover effect, he said, will be massive as key sectors of the economy and businesses such as packaging industries, bottles, cartons, labels, cork, laminates, glue, ink, printing, laboratory, marketing, consulting, and media, among others, will suffer.

    The DIBAN chairman also argued that the imposition of exorbitant duties on locally manufactured goods contradicts government’s objective of growing local industries and shoring up revenues. He said, for instance, the massive job cuts, which is sure to hit the sector, will take its toll on revenue generated by government on Pay As You Earn (PAYE) taxes, which is estimated at N60 billion per annum.

    “At 600mn litres and N200 per litre, government is asking for N120 billion in tax whereas the industry does not even generate up to half of that in sales. Therefore, jacking up the duty by 500 per cent overnight will deter businesses and investors from investing in Nigeria,” Anegbe said. He added that many foreign investors have seen a huge market in Nigeria’s alcohol industry, which is estimated at over $2 billion.

    As if the negative impacts of the policy were not bad enough, the DIBAN chief said there was no prior engagement or consultation with indigenous producers of wines and spirits before adopting the new excise duty. “The Association made unsuccessful frantic attempts at getting the attention of the Minister of Finance to hear us out before the migration from the current ad valorem to the specific scheme,” he said.

    Some development experts have come down hard on the new policy, describing it as wrongly-headed and counter-productive. For instance, Business Renaissance Group President Mr. Omife Omife said the policy could affect investments in the manufacturing sector. He, therefore, called on the Federal Government to reverse the policy.

    “Nothing should be done to endanger the sector. It is apparent that the announced astronomical increase in excise duty is bound to endanger the sector if not reviewed and rescinded,” he said.

    Omife warned, for instance, that with the new tariff regime, firms in the sector would face high risk of possible shutdown, especially in the low price segment, which accounts for 78.65 per cent volume of the spirits and wines segment.

    He noted that the new excise duty would also penalise average Nigerians as they would no longer be able to afford the new prices that include the exorbitant excise duty.

    The  expert also pointed out that given the challenges of border control and illicit market, the attractiveness of the price increase driven by higher duty would result in smugglers bringing in unregistered and untaxed products. This, he said, would result to loss of revenue to the government.

    “The astronomical increase in the tariff is counter-productive and will lead to massive job loss, turn the country into a dump yard for foreign products, further pauperise Nigerians and stifle growth in an otherwise resilient sector of the economy,” Omife warned.

    Prior to the take off of the policy, the Senate also kicked, insisting that the tariff hike will hurt local distillers of beverages.

    In a motion titled: “Urgent Need to Review the Proposed Excise Tariff Increment in Order to Save Local Distillers of Beverages from Looming Extinction,” Senator Benjamin Uwajumogu (APC, Imo North) said with the tariff increase, the fate of the industry hangs in the balance.

    Uwajumogu, argued that for instance, the beverage industry, which is one of the oldest surviving sectors, employs about 250, 000 Nigerians and that one of the consequences of the tariff hike would be the potential loss of these jobs.

    He added that direct and indirect job losses would further worsen the deteriorating unemployment situation in the country with the attendant social consequences.

    “The tariff increase will kill the fledgling industry, which is presently fragile and may wreak incalculable damage on our economy.

    “It will also lead to increase in smuggling activities, huge capital flight across borders to more investor friendly countries, with the attendant danger of increase in restiveness amongst the citizenry under enormous socio economic pressure,” Uwajumogu said.

    The senator also said the negative impact on the economy, which is still emerging from recession, would further destroy the chances of the economy for full recovery, warning that an investment portfolio exceeding N420 billion was under real threat of extinction.

    However, there are some stakeholders who feel that the new tariff regime was a welcome development. For instance, the policy bodes well with religious organisations, local and international non-governmental organisations (NGOs), that have been vigorously campaigning for the control of what they termed as the “tobacco epidemic” and the need to discourage alcohol abuse.

    Some of them believe Nigeria lacks very stringent policies or measures on the production and marketing of tobacco and alcohol. They argue that the country requires vigorous and multi-pronged strategies in the control of the two products beyond the “Drink Responsibly” and “Smokers are Liable to Die Young” themes commonly used by brewers and tobacco companies, in their marketing campaigns.

    This was why the duty hike gladdened the Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN). ERA/FoEN in a statement by its Head of Media and Campaigns, Philip Jakpor, said the group’s Deputy Executive Director, Akinbode Oluwafemi, lauded the Federal Government for the review.

    He also went a notch higher. He said the Federal Government should match its rates with that of other countries across Africa because  the new rates still fell short of the more aggressive but very effective recommendations of the World Health Organisation (WHO) in Article 6 of the Framework Convention on Tobacco Control (FCTC), which is 70 per cent excise on tobacco products.

    Will government bow to superior economic arguments and reverse the policy? Are morality and health concerns enough reasons to sustain the policy? Therein lies the dilemma.

     

  • Buhari okays new excise duty rates for alcohol, tobacco, others

    President Muhammadu Buhari has approved an amendment to the excise duty rates for alcoholic beverages and tobacco with effect from today.

    The President granted a grace period of 90 days to manufacturers before the take off of the new excise duty regime.

    There is, however, no increase in excise duty of other local excisable products.

    Minister of Finance, Mrs. Kemi Adeosun, who broke the news in Abuja, said the new duty rates were spread over a three-year period from this year to 2020 to moderate the impact on prices of the products.

    She said the new duty regimes followed all-inclusive stakeholder engagements by the Tariff Technical Committee of the Federal Ministry of Finance with key industry stakeholders.

    According to her, the upward review of the excise duty for alcoholic beverages and tobacco was to achieve a dual benefit of raising the government’s fiscal revenues and reducing the health hazards associated with tobacco-related diseases and alcohol abuse.

    “The Tariff Technical Committee (TCC) recommended the slight adjustment in the excise duty charges after cautious considerations of the Government’s Fiscal Policy Measures for 2018 and the reports of the World Bank and the International Monetary Fund Technical Assistance Mission on Nigeria’s Fiscal Policy.

    “The effect of the excise duty rates adjustment on trade and investment was also assessed by the Federal Ministry of Trade and Investment and it adopted the recommendations of the TTC. Furthermore, peer country comparisons were also carried out showing Nigeria as being behind the curve in the review of excise duty rates on alcoholic beverages and tobacco,” Mrs. Adeosun said.

    Following the President’s approval, Mrs Adeosun said the new excise duty rate on tobacco was now a combination of the ad-valorem base rate and specific rate while the ad-valorem rate was replaced with a specific rate for alcoholic beverages.

    “For alcoholic beverages, the current ad-valorem rate will be replaced with specific rates and spread over three years to moderate the impact on prices. This will curb the discretion in the Unit Cost Analysis (UCA) for determining the ad-valorem rate and prevent revenue leakages,” she said.

    On tobacco, the finance minister said: “The government will maintain the current ad-valorem rate of 20 per cent and introduce additional specific rates with the implementation to be spread over a three-year period to also reasonably reduce the impact on prices.”

    Under the new excise duty, rates for tobacco in addition to the 20 per cent ad-valorem rate, each stick of cigarette will attract a N1 specific rate per stick (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.

     

    Mrs Adeosun 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 Gambia.

    The new specific excise duty rate for alcoholic beverages cuts across beer and stout, wines and spirits for the three years 2018 to 2020.

    Under the new regime, beer and stout would attract N0.30k per centiliter (Cl) in 2018 and N0.35k per Cl each in 2019 and 2020. Wines would attract N1.25k per Cl in 2018 and N1.50k per Cl each in 2019 and 2020, while N1.50k per Cl was approved for Spirits in 2018, N1.75k per Cl in 2019 and N2.00k per Cl in 2020.

    She added that the new excise duty regimes are in line with the Economic Community of West African States (ECOWAS) directive on the harmonisation of member-states’ legislations on excise duties.

    It would be recalled that the ECOWAS Council of Ministers had at its 62nd and 79th Ordinary Sessions in Abuja in May 2009 and December 2017, respectively, issued directives on the harmonisation of the ECOWAS Member States’ Legislations on Excise Duties.

    The directives seek to harmonise member-states’ legislations on excise duties of non-oil products and also stipulate the scope of application, rate of taxation, taxable event and amount.

     

  • While celebrating cannabis day…

    When the word “cannabis” is used or spoken of, a negative connotation readily comes to mind. It usually goes by different street names like weed, igbo etc.

    Each year on the 20th of April, cannabis advocates around the global world gather to celebrate cannabis culture even though it might be legal or illegal in some countries.

    It is a genus of flowering plant in the family cannabaceae. It is often used as a recreational drug which is only behind alcohol and tobacco.

    Medically, has long been used for hemp fibre, oils and other medicinal purposes. In the United States, it was believed that over 100 million Americans have tried cannabis, with twenty-five million Americans having used it within the past year.

    In Nigeria, there seems to be a widespread abuse of the plant, especially amongst the youths. We find it being abused in parties, gatherings and dark corners in our milieu.

    Smoking it causes a lot of damage to the human body. It shrinks the brain of a person, and can eventually cause grave psychological disorders or death.

    Other side effects of cannabis include the destruction of the lungs and risk of developing cancer of the respiratory tract.

    The effects experienced by users and abusers are variable and will depend upon the dose, method of administration, prior experience, any concurrent drug use, personal expectations, mood state and the social environment in which the drug is used.

    Asides the overtly destructive nature of cannabis, it still has its usefulness, especially within the legal framework of the country. It can be used to provide warmth especially in very cold regions of the world. It is also used in improving appetite in those who are HIV/AIDS positive. Quite ironically, medical conditions like lung cancer and Emphysema have been shown to regress when cannabis is introduced into the mix.

    On the overall scale, the (illegal) use of cannabis should be seriously dissuaded and condemned as this could portend serious health and social risks for us all.

  • Environmentalists hail review of excise duty on tobacco

    ENVIRONMENT Rights Action/Friends of the Earth Nigeria (ERA/FoEN) has hailed the Federal Government for increasing excise duty on tobacco products.

    In addition to 20 per cent ad-valorem rate, each stick of cigarette will attract N1 rate (N20 per pack of 20 sticks) in 2018, N2 rate per stick (N40 per pack of 20 sticks) in 2019 and N2.90k rate per stick (N58 per pack of 20 sticks) in 2020.

    Minister of Finance Mrs. Kemi Adeosun said the  duty would take effect from Monday, June 4, 2018, after a 90-day grace to local manufacturers.

    The minister said the new duty for tobacco and alcohol was necessitated by the need to raise revenue and reduce hazards associated with tobacco-related diseases and alcohol abuse.

    With the new rate, Nigeria’s cumulative specific excise duty rate for tobacco is 23.2 per cent of the price of the most sold brand,  lower than Algeria, South Africa and The Gambia with 38.14 per cent, 36.52 per and 30 per cent.

    In a statement in Lagos, ERA/FoEN described the increase as good but urges the government to match the rates in Nigeria with that of other Africa countries.

    ERA/FoEN’s Deputy Executive Director Akinbode Oluwafemi said: “We applaud the Federal Government for acceding to the popular wishes of Nigerians for tobacco products to be priced beyond the reach of our kids and the poor who are unfortunately targeted by the tobacco industry through their cheap but lethal products.”

    Oluwafemi noted that while the rates are a good start, they fall short of recommendations of the World Health Organisation (WHO) in Article 6 of the Framework Convention on Tobacco Control (FCTC) which is 70 per cent excise on tobacco.

    He said survey after survey, including the Africa Tobacco Control Alliance Single Sticks Report and the Big Tobacco Tiny Targets Nigeria Report of last year, exposed the tobacco industry as targeting children through points of sale near schools and other locations they frequent to attract them to smoking.

  • Buhari approves new excise duty rates for alcoholic beverages, tobacco

    President Muhammadu Buhari has approved an amendment to the excise duty rates for alcoholic beverages and tobacco with effect from Monday, 4th June, 2018.

     A statement from the federal ministry of finance signed by Oluyinka Akintunde Special Adviser, Media and Communications to the Minister of Finance said President Buhari has also granted a grace period of 90 days (three months) to all manufacturers before the commencement of the new excise duty regime.

     Oluyinka Akintunde however said there “is no increase in excise duty of other locally excisable products.”

     The Minister of Finance, Mrs. Kemi Adeosun, who made this known on Sunday in Abuja, 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.

     The Minister disclosed that “the new excise duty regimes followed all-inclusive stakeholder engagements by the Tariff Technical Committee of the Federal Ministry of Finance with key industry stakeholders.”

     According to her, the upward review of the excise duty rates for alcoholic beverages and tobacco was to achieve a dual benefit of raising the government’s fiscal revenues and reducing the health hazards associated with tobacco-related diseases and alcohol abuse.

     She said, “the Tariff Technical Committee (TCC) recommended the slight adjustment in the excise duty charges after cautious considerations of the government’s Fiscal Policy Measures for 2018 and the reports of the World Bank and the International Monetary Fund Technical Assistance Mission on Nigeria’s Fiscal Policy.

     “The effect of the excise duty rates adjustment on trade and investment was also assessed by the Federal Ministry of Trade and Investment and it adopted the recommendations of the TTC.”

     Adeosun added that “peer country comparisons were also carried out showing Nigeria as being behind the curve in the review of excise duty rates on alcoholic beverages and tobacco.”

     Following the President’s approval, Adeosun disclosed that the new excise duty rate on tobacco was now a combination of the existing ad-valorem base rate and specific rate while the ad-valorem rate was replaced with a specific rate for alcoholic beverages.

    The Minister added that, “for alcoholic beverages, the current ad-valorem rate will be replaced with specific rates and spread over three years to moderate the impact on prices. This will curb the discretion in the Unit Cost Analysis (UCA) for determining the ad-valorem rate and prevent revenue leakages.”

    “For Tobacco, the government will maintain the current ad-valorem rate of 20 per cent and introduce additional specific rates with the implementation to be spread over a three-year period to also reasonably reduce the impact on prices.”

    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 a N1 specific rate per stick (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 Gambia.

    The new specific excise duty rate for alcoholic beverages cuts across Beer & Stout, Wines and Spirits for the three years 2018 to 2020.

    Under the new regime, Beer & Stout would attract N0.30k per centiliter (Cl) in 2018 and N0.35k per Cl each in 2019 and 2020.

    Wines would attract N1.25k per Cl in 2018 and N1.50k per Cl each in 2019 and 2020, while N1.50k per Cl was approved for Spirits in 2018, N1.75k per Cl in 2019 and N2.00k per Cl in 2020.

    The Minister added that the new excise duty regimes are in line with the Economic Community of West African States (ECOWAS) directive on the harmonisation of member-states’ legislations on excise duties.

    It would be recalled that the ECOWAS Council of Ministers had at its 62nd and 79th Ordinary Sessions in Abuja in May 2009 and December 2017, respectively, issued directives on the harmonisation of the ECOWAS Member States’ Legislations on Excise Duties.

    The directives seek to harmonise member-states’ legislations on excise duties of non-oil products and also stipulate the scope of application, rate of taxation, taxable event and amount.

  • Review tariff on alcohol, tobacco, union urges govt

    • Says 2,000 jobs lost in two years

    The Food, Beverage and Tobacco Senior Staff Association (FOBTOB) has urged the Federal Government to re-evaluate the recommendation to raise tariff on alcohol and tobacco to prevent job losses.

    FOBTOB General Secretary Mr Iji Solomon made the call when he spoke to reporters.

    Finance Minister Mrs Kemi Adeosun had recommended an increased tariff on alcohol and tobacco because of their health implications and to raise revenue.

    According to Solomon, the recommendation to raise tariff on the products could affect their manufacturers and lead to redundancy.

    “There is no doubt that the minister proposed the increase based on ECOWAS Common External Tariff, but it should not be at the detriment of local manufacturers or the economy,” he said.

    The union’s scribe said the price disparity for each of the products by the minister was not understandable but that any increase would impact on the workforce.

    He said the “Ad valorem” tariff (Value Tax) was a normal tariff on products in the industry but it could increase the unit tax of tobacco.

    According to Solomon,  about 2,000 workers have lost their jobs in the last two years because of the closure of companies and economic indices.

    He said the only tobacco company in Nigeria needed incentives while distilleries should be encouraged to employ more workers rather than sack them.

    “Many distilleries closed business because they can no longer access foreign raw materials for  production. Only a few are working and any increase will lead to redundancy.

    “Since the distiller companies use local materials, increase in tariff can lead to their collapse. Secondly, with an increased tariff, the distillers will be unable to compete with imported ones,” he said.

    Solomon urged the government to collaborate with industry stakeholders such as Food, Beverage and Tobacco Employees and Manufacturers Association of Nigeria (MAN) on the issue.