ECOWAS To Increase Excise Duty on Tobacco Products, Regional Revenue

By Chinelo Chikelu, Abuja

ECOWAS has begun talks to increase excise duty on tobacco products, a measure that is targeted to raise revenue for member states and decrease tobacco consumption in the region.

This is one of the major topics of discuss by the Financial Council of Ministers meeting held at the ECOWAS Commission aimed at harmonizing the draft ECOWAS Customs Codes.

An excise duty is a type of tax charged on goods produced within the country, as opposed to customs duties, charged on good from outside the country.

Vice President of the ECOWAS Commission, Edward Singhatey, said the community is working on a draft document that will harmonize excise duties on tobacco products.

The draft, he says will also embody the legislative and regulatory processes of member states in tracking and tracing tobacco products. This, he said will further “facilitate the smooth running of the domestic market of tobacco products and ensure compliance of member states to the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) and the Protocol to Eliminate Illicit Trade in Tobacco Products.”

Revenue from customs represents a large percentage of national revenues. However, with global trade liberalization obligating member states to establish effective tax collection mechanism, countries must seek other sources of revenue to avoid the pitfalls of international trade taxes.

Nigeria’s Minister of Finance, Kemi Adeosun, says Nigeria is setting up policies to increase excise tax on tobacco, cigarettes, alcohol and tobacco beverages. The country she says, is further considering the global practice of the use of tax stamps and special package markings to track-and-trail excisable goods.

“Without putting in place an effective track-and-trace system, illicit trade will undermine trade and tax measures and will have serious adverse effects on public health in West Africa,” clarified Adeosun, who was represented by the Finance Permanent Secretary, Mahmoud Dutse.

Currently only made-in-Nigeria goods are charged excise duties as provided in the Customs, Excise and Tariff Consolidation Act no 16, of 1997. Adeosun however said, “Nigeria is currently in the process of amending the Act to ensure that both locally manufactured and imported goods are liable to excise duties.”

Nigeria, she adds also supports ECOWAS directive to exclude VAT charges on raw foods, medicaments and pharmaceuticals. She stated there is an ongoing review of the VAT exemption list, of which many of the aforementioned products are already entrenched in the VAT law.

Adeosun assured the ministers of Nigeria’s support of the ECOWAS Customs Code and its commitment to a sustainable, functional, regional integration projects that will ensure economic prosperity in the region.

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