Prices Of Cigarettes, Shisha To Go Up As FG Announces New Tobacco Tax Regime

Consumers of various types of cigarettes and Shisha may have to now pay higher prices to get the product as the Federal Government has announced a new tobacco tax regime.

On Friday, April 16th, the Nigerian government declared that a new tobacco tax regime will take effect on June 1, 2022, Naija News understands.

A statement released on the development noted that Shisha will be taxed by N3,000 per litre, N1,000 per Kg and it will be increased by N500 yearly.

This was contained in a statement issued through the Director of Technical Services at the Federal Ministry of Finance, Fatima Hayatu.

Hayatu spoke during a meeting with the Civil Society Legislative Advocacy Centre (CISLAC), Naija News reports.

Okeke Anya, the organization’s Tobacco Taxation Working Group’s leader, is the Programme Manager for Democratic Governance, the government official noted.

The tobacco sector, according to Hayatu, is a formidable one, and the ministry is committed to reducing the illicit flow of the product into the market.

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

To analyse what other ECOWAS countries are doing, the government is forming a tobacco tax working group.

According to the director, the tax on a cigarette stick used to be N2.90kobo but has now risen to N4.20kobo.

This was in response to an ECOWAS guideline of 0.02 cents per cigarette stick, which works out to N8.40kobo at the current currency rate.

However, it was agreed to meet the recommendation halfway which would give N4.20kobo starting from 2022.

“Then in 2023, an 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 are 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 litre, N1,000 per Kg and it will be increased by N500 yearly”, Hayatu disclosed.

Anya called on the federal government to include shisha pots and other electric smoking equipment in the new tobacco tax framework in his remarks.

According to the CISLAC official, this would reduce demand and raise revenue for the country.

Tobacco has a devastating effect on the health of Nigerians”, he stressed, adding that it should be well taxed as a luxury good.

Tax increase 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.

This article was originally published on Nigeria News