â€¢ Says economy is attracting huge interest from foreign investors
Ndubuisi Francis in Abuja, with agency report
The Minister of Finance, Mrs. Kemi Adeosun, is proposing increased tariff for cigarette and alcohol.
Her proposal is in line with the implementation of the ECOWAS Common External Tariff (CET), one of the instruments of harmonising member states to strengthen its common market agreed upon on October 25, 2014.
In a memo sent to President Muhammadu Buhari and seen by TheCable, Adeosun suggested that a two-part tariff be approved for tobacco products.
A two-part imposes two types of import levies on the same item.
Adeosun suggested a 20 per cent â€œad valoremâ€ tariff and a specific tariff of N1 per stick be placed on cigarettes and tobacco products.
She also suggested that a specific tariff of 35 kobo per CL be placed on beer and stout, N1.50k per CL on wines, and N2 on spirits and other alcoholic beverages.
Ad valorem tariff is levied as a fixed percentage of the value of a commodity.
According to the minister, this was a recommendation made by the Tariff Technical Committee (TTC), which is chaired by the ministry of finance with members from ministries of industry, agriculture, Central Bank of Nigeria (CBN), Federal Inland Revenue Service (FIRS), Office of the Secretary to the Government and Manufacturers Association of Nigeria (MAN).
â€œFurther to the request, the chief of staff to Mr President requested for my views on the matter. As a result of this, the TTC deliberated on the subject and recommended for an upward review of excise rate on tobacco and alcohol, taking into consideration their health implications and revenue potential,â€ she wrote.
â€œIn addition, it also recommended the introduction of a specific rate of excise on alcohol including beers and a mixture of ad valorem and specific rate excise structure on tobacco products in ECOWAS member states.
â€œIn line with the recommendations of the TTC, I wrote and requested your excellencyâ€™s consideration and approval for the proposed revised rates of excise on alcohol and tobacco, vide letters: FMF/OHMF/TA/1/2017, dated October 30, 2017 and FMF/PHMF/ALCOHOL/1/2017, dated November 8, 2017.â€
In November, Adeosun told the ECOWAS financial council of ministers that the federal government was working on policies to increase taxes on tobacco and alcohol.
In 2017, the World Health Organisation (WHO) called for increased taxes on tobacco products to discourage its use.
Nigerians smoke about 20 billion sticks of cigarette yearly, according to Isaac Adewole, Minister of Health.
Nigeria is also said to be the highest alcohol-drinking country in the world.
Meanwhile, Adeosun yesterday also declared that the Nigerian economy is increasingly attracting huge interest from foreign investors, noting that the momentum was occasioned by huge spending on infrastructure by the government.
She noted that such interest would translate into massive investments, culminating in the creation of jobs and a reduction in the poverty level in the country.
The minister spoke at the headquarters of the ministry in Abuja while playing host to a delegation of about 20 investors drawn from various countries and continents who are in Nigeria to discuss investment opportunities
She said the huge investment which the federal government is making on infrastructure projects across the country was attracting fresh investments into the country.
The minister told the delegation led by a one-time finance minister. Dr Shamsudeen Usman, that in 2017 alone, the sum of N1.2 trillion was released for capital projects.
According to her, one of the cardinal focus of the current was to address the infrastructure deficit in the country through targeted spendings at projects that would unlock the economic potential of the country.
The minister noted that it was an auspicious time for investors to be in the country.
In her words, â€œItâ€™s a great time for investors to be in Nigeria. For us, itâ€™s a more better time now than last year because finally we think that we are beginning to address through deliberate policies, some of the most stubborn problems that have held back Nigeriaâ€™s growth.
â€œWe have gone through a very difficult adjustments but we are seeing that the macroeconomic fundamentals are much more positive and the outlook is that they will remain positive.
â€œThe goodness is that the narrative that we have been adopting around the reason for our reliance on oil we have actually beginning to take steps in terms of reducing our benchmark price by keeping it low, allowing us to rebuild some of our buffers.
â€œOur budget is predicated on lower oil price, and for me, we are discussing on revenue because we think that is the missing part of the Nigeria jig-saw.
â€œWe always want to increase our tax-to-GDP ratio from six per cent to an initial target of ten and the long term goal is to be around the 15 to 20 per cent range,â€ she said.
The economy, she added has started seeing the impact of the expanded budget of the federal government with massive infrastructure investments in power, roads, and rails.
â€œOur commitments in solving the infrastructure challenges in Nigeria is firm because we think that is what would unlock growth in agriculture, and solid minerals and make us move away from our over reliance on oil,â€ she stated.