Nigeria Missing Out On N600bn Alcohol, Tobacco Tax Windfall - World Bank

A senior tax specialist of the World Bank, Rajul Awasthi, has said that Nigeria is missing out on a N600bn tax windfall by not increasing tax on alcohol and tobacco as recommended in the National Development Update report.

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He said Nigeria has one of the lowest excise duty rates on both products in Africa.

He also said the country’s rate on cigarettes is lower than the standard adopted by the Economic Community of West African States.

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Awasthi said, “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 a significant amount of revenue. Similarly, if they are to adopt ECOWAS, a standard, that will also raise the revue significantly. What is more important is that these two sources will not impinge on consumption growth; in fact, these harm goods. So, taxing them is actually good from the health perspective.

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“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 duties on tobacco and alcohol can raise more than N600bn a year.”

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