Nigeria Can Earn N600bn From Excise Duty On Tobacco, Alcohol – W’Bank

The World Bank has advised Nigeria to increase excise duties on tobacco and alcohol as recommended in the National Development Update report, as this can grow its revenue significantly and generate N600billion annually.

A senior tax specialist of the bank, Rajul Awasthi gave the counsel yesterday at a virtual discussion on domestic revenue mobilisation.

Awasthi stated that Nigeria has one of the lowest excise duty rates on tobacco and alcohol in Africa, adding that Nigeria’s duty rate on cigarettes is lower than the standard set by the Economic Community  of West African States.

He therefore advised the federal government to either adopt the excise standards for tobacco and alcohol recommended by the ECOWAS or Kenya to boost the country’s revenue from tax.

He added that this kind of tax increase will not impact the majority of the population or low income earners but improve the ease of tax compliance monitoring.

“On excise, what we see is that Nigeria has one of the lowest excise rates on alcohol and cigarettes, on cigarettes, they are even lower on the ECOWAS target.”

“ So if Nigeria were to adopt the same rate of excise duty that Kenya has adopted, they can raise significant amount of revenue. Similarly, if they are to adopt ECOWAS, standard, that will also raise the revue significantly.

, 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.

“Excises on tobacco and alcohol, do not impact the vast majority of people and compliance can be monitored much more easily by the compliance agencies. If the measures outlined in our report are implemented, these excise duty on tobacco and alcohol can raise more that 600 billion naira a year.”

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He further advised the federal government to embrace tax policies that do not endanger investments, jobs or the growth of the economy.




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