Nigeria to effect higher taxes on cigarettes, shisha, others June 1

Nigeria’s Federal Government has declared that the new tobacco tax scheme would take effect on June 1, 2022.

Fatima Hayatu, Director of Technical Services at the Federal Ministry of Finance, stated this at 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 unlawful flow of the product into the market.

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

The government is set to constitute a tobacco tax working group to study what other ECOWAS countries are doing.

The director said the taxation on a stick of cigarette was N2.90kobo but has now increased to N4.20kobo.

This followed ECOWAS recommendation of 0.02cents per stick of cigarette which, at the current exchange rate, would give N8.40kobo.

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

“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.

In his remark, Anya urged the Federal Government to include shisha pots and other electric smoking devices in the new tobacco tax regime.

The CISLAC official said this would crash their demand and increase revenue for the nation.

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“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.

Anya insists citizens will like to know the tobacco products that have paid the right tax duties and where they come.