Prices of cigarettes, shisha may go up as Nigerian govt announces new Tobacco tax regime

Nigeria’s Federal Government stated on Friday that the new tobacco tax regime will take effect on June 1, 2022.

Fatima Hayatu, Director of Technical Services at the Federal Ministry of Finance, stated this during a meeting with the Civil Society Legislative Advocacy Centre (CISLAC).

Okeke Anya, the organization’s Tobacco Taxation Working Group’s leader, is the Programme Manager for Democratic Governance.

The tobacco sector, according to Hayatu, is a formidable one, and the ministry is committed to reducing the illicit flow of the product into the market.

She hinted that preparations were in the works to enlist the help of key stakeholders in the implementation of a strong track and trace system.

To analyse what other ECOWAS countries are doing, the government is forming a tobacco tax working group.

According to the director, the tax on a cigarette stick used to be N2.90kobo but has now risen to N4.20kobo.

This was in response to an ECOWAS guideline of 0.02 cents per cigarette stick, which works out to N8.40kobo at the current currency rate.

“However, it was agreed to meet the recommendation half-way which would give N4.20kobo starting from 2022.

Read also: Group reiterates call for increased tax on cigarettes

“Then in 2023, and additional 50kobo would be added to make N4.70kobo then in 2024, 50kobo would be added to make it N5.20kobo.

“These will all reflect the current increase of the Ad Valorem from 20% to 30%. This is a gradual increase in the tax, and all is currently in review.

“The increase in tax/levies will not only be for tobacco products, but for others such as shisha, similar classification, the apparatus used to convey and consume them.

“Shisha will also be taxed by N3,000 per liter, N1,000 per Kg and it will be increased by N500 yearly”, Hayatu disclosed.

Anya called on the federal government to include shisha pots and other electric smoking equipment in the new tobacco tax framework in his remarks.

According to the CISLAC official, this would reduce demand and raise revenue for the country.

“Tobacco has a devastating effect on the health of Nigerians”, he stressed, adding that it should be well taxed as a luxury good.

“The increase in tax will be an avenue to generate revenue. This is how many countries operate because consumption of tobacco is a luxury and not a necessity,” he said.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now