Halt increment of tariff on alcoholic beverages, tobacco products, Senate tells FG

The Federal Government has been asked to put on hold the implementation of its increment policy on alcoholic beverages and tobacco products.

This Senate gave the directive on Tuesday during its plenary.

The Upper Chamber directed that the implementation of the excise tariff rate should not be effected until all relevant stakeholders were appropriately and adequately consulted

The Senate reasoned that the discussion with stakeholders on the tariff regime should pave the way for consensus and implementation approach.

The resolutions followed the adoption of the report of the Senate Committee on Finance, which considered a motion on “The urgent need to review the excise tariff increment in order to save local distillers of beverages from looming extinction.”

Consideration and adoption of the report was consequent upon the presentation of the report by the Chairman of the Senate Committee on Finance, Senator John Enoh (APC, Cross River Central).

The increase in the excise tariff rates on alcoholic beverages and tobacco products was approved by President Muhammadu Buhari after the adoption of the recommendation of the Tariff Technical Committee of the Federal Government.

It was reported that the Federal Government resolved to increase the excise rate because of government’s drive to increase revenue generation and the belief that taxation is a veritable tool in controlling the consumption of alcohol beverages as they have negative health effect on consumers

Recall that one of the critical stakeholders, the Manufacturers Association of Nigeria (MAN) had raised the alarm that the increase would give more competitive advantage to foreign products which are not going to be affected by the increment.

Describing the increment as “outrageous as it stands at 500 per cent” MAN posited that “if the new rate is fully implemented after the three years incremental period, it is believed that a number of the local manufacturers will have no other option than to suspend operation.

The Association suggested that 35 per cent increment at maximum should be implemented by the government, saying that it would guarantee the survival of the industry rather than 500 per cent increment which would put the entire industry in a very difficult situation

However, the Senate said that an increment of not more than 50 per cent at maximum should be adopted, “as it becomes necessary for the Federal Government to increase the tariff rate in order to boost revenue generation as the rate will provide more leniencies to the affected manufacturers and give more hope for the survival of the indigenous companies.

The legislators as well resolved that there was serious need to increase the import duties of foreign alcoholic beverages and tobacco products in order to give local indigenous companies more competitive edge

It advised the Federal Government to sensitize and carry along the producers and consumers of alcohol and tobacco products to understand the need for the increase and its advantage in adding to the economic fortune of the country.

The Senate further agreed that if the new excise tariff rate was allowed to be implemented by the government, it would stand at about 500 per cent after the three years incremental period.

The lawmakers also argued that if the tariff was fully implemented without review, it was capable of compelling affected companies that could not stand with the new rate to either shut down or relocate their full operation to neighbouring African countries with favourable and flexible taxation policies for the sector.