FG Begins Implementation of New Tariffs on Alcohol, Cigarettes Today

  Group heads to court

The recently approved excise duty for alcoholic beverages and tobacco will take effect today.

President Muhammadu Buhari had approved the amendment to the excise duty rates in March.

However, a non-gover-nmental organisation, Business Renaissance Group, has asked the Federal High Court in Abuja to restrain the Minister of Finance, Mrs. Kemi Adeosun, from implementing the new tariffs on alcoholic beverages and tobacco.

The amendment came after TheCable had reported that Adeosun had written to the president seeking approval for the excise review.

Adeosun had said the reviews would be from 2018 to 2020 and was to raise the government’s fiscal revenues.

She also said it would reduce the health hazards associated with tobacco-related diseases and alcohol abuse.

A statement from her ministry had said: “The Tariff Technical Committee (TCC) recommended the slight adjustment in the excise duty charges after cautious considerations of the government’s fiscal policy measures for 2018 and the reports of the World Bank and the International Monetary Fund Technical Assistance Mission on Nigeria’s fiscal policy.

“The effect of the excise duty rates adjustment on trade and investment was also assessed by the federal ministry of trade and investment and it adopted the recommendations of the TTC.

“Furthermore, peer country comparisons were also carried out showing Nigeria as being behind the curve in the review of excise duty rates on alcoholic beverages and tobacco.”

The minister had said under the new rates for tobacco, in addition to the 20 per cent ad-valorem rate, each stick of cigarette will attract one naira specific rate.

She said by 2019, tobacco would attract two naira specific rate per stick while it will attract N2.90 kobo specific rate per stick by 2020.

Under the review, beer and stout will attract 0.30k per centilitre (Cl) in 2018 and 0.35k per Cl each in 2019 and 2020.

Wines will attract N1.25k per Cl in 2018 and N1.50k per Cl each in 2019 and 2020; while N1.50k per Cl was approved for spirits in 2018, N1.75k per Cl in 2019 and N2 per Cl in 2020.

Meanwhile, in an originating summons brought by Business Renaissance Group, the court was asked to make an order compelling the minister and her agents while reviewing any tariffs, to take into consideration, its interest, the generality of the citizens and the clear intendments of the 1999 Constitution with regard to growing a robust and all inclusive economy for the good of all Nigerians as a fundamental obligation of government.

The plaintiffs are also seeking a declaration that the increment of the tariff duty on alcoholic beverages and tobacco is against public policy and not in tandem with the intention behind sections 16 and 42 of the 1999 Constitution as amended.

They therefore asked the court to make a declaration that the phenomenal increment of tariff duties on alcoholic beverages and tobacco is indefensibly and unjustifiably selective, discriminatory, unreasonable and unfairly oppressive of a particular segment of the Nigerian society and the plaintiffs in particular, who use the affected products and whose means of livelihood are threatened by the new oppressive tariffs.

The plaintiffs are also seeking a declaration that a selective and arbitrary increase in commodity tariffs targeted only at a particular section of economy players and users in the country and with the aim of shrinking that economic segment, amounts to economic and social emasculation of the citizens affected and is ipso facto against public interest and is therefore unconstitutional. They want the court to make declaration that the propagation and enforcement of said discriminatory and oppressive tariffs is an act of executive bad faith, recklessness and is not a bona fide or positive exercise of governmental power and therefore runs contrary to the raison d’etre of governance – as made clear in the 1999 Constitution.

The suit brought on behalf of the plaintiffs by Christian Hon from the Law firm of J-K Gadzama (SAN), is coming after the expiration of a 30-day ultimatum given to the finance minister to rescind the hike in tariffs on alcoholic beverages and tobacco or face legal action.

It also seeks the determination by the court, that the increase in the tariff on alcohol beverages and tobacco is discriminatory, oppressive and against public policy bearing in mind the provisions of sections 16 and 42 of the 1999 Constitution.

The Business Renaissance Group had at a press conference in Abuja on April 17, 2018 condemned the hike as insensitive, draconic and that done without consulting the critical stakeholders. It averred that the hike has the potential to create loss of revenue by government, mass sack of Nigerians working in the beverage and tobacco industries, dumping of cheap imports as well as likely health challenges occasioned by the resort to cheap and unhealthy wines and spirits by those who will not be able to afford the likely price increase which the hike in tariff will necessitate. 

First Bank

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