Increasing excise duty on alcoholic beverages and cigarettes at a time when the government is working hard to reduce inflation rate is not right. This might encourage smuggling of these products from neighbouring countries into Nigeria and the production of substandard substitutes versions all over Nigeria. It will in the long run create additional inflation and work against the government’s efforts to reduce inflation as these costs will be passed over to consumers. There is also the problem of job losses; affected companies would strive to reduce their cost of production in order to maintain profit.The reasons given for increasing the tariffs are not believable and not economically reasonable. The revenue which the government intends to generate from it will be lost through the foregoing demerits.
I applaud the increase but the government should be decisive on how it can tackle the abuse of tobacco in the country. Government is earning revenue from cigarette producing companies and it would not want to block that source of revenue. More effort should be directed towards sensitising citizens on the health risks associated with smoking of tobacco and excessive consumption of alcohol.
The hike in duty is a welcome development, because anybody that wants to enjoy cigarette and alcohol should be able to pay additional price. They are taken for pleasure, hence the smokers and drinkers should prepare to pay extra amount without remorse. If these items are of necessity, everybody will raise an eyebrow. For example, if its food or drugs, we will all move against it, but it is the other way round. I cannotfault this policy.
It is a great idea and will be beneficial to the country. The harmful effects of such products in the long run are costly health-wise. Generating more revenue for the country is never a bad thing as long as it is not looted and squandered by the corrupt elite. The increase in excise duty will also serve as a deterrent to reduce the risks of abuse and disease.
The hike in excise duty for alcoholic beverages was long overdue. Alcoholic beverages and tobacco are classified under luxury goods; those who want to consume such products should be willing to pay more taxes.The government should be generating revenue from those areas that may cause problems for the economy in terms of health. To discourage consumers from taking these products, you will have to tax them more; that is the practice all over the world.
The Federal Government should reverse its decision as the policy will affect investments in the manufacturing sector. I sell alcoholic drinks and there is every possibility that some manufacturing companies will shut down because of the eventual increase in production costs.The average Nigerian will be penalised for consuming such products as they would no longer be able to afford the new prices.The wines and spirits industry is one of the few surviving sectors of the Nigerian economy and all patriots and men of good conscience should strive to ensure that the sector flourishes. Looking at the challenges of border control and smuggling, the price increase driven by higher duty would result in smugglers bringing in unregistered and untaxed products. It will also result to loss of revenue for the government.The increase in the tariff is counter-productive and will lead to massive job loss, turn the country into a dump yard for foreign products and stifle growth in an otherwise resilient sector of the economy.
It will not reduce consumption; rather, it will increase the rate of crime. When addicts can’t afford it, they tend to steal money through all means to buy it. May be Nigeria will be the first country to ban tobacco; the government should also place a ban on soft drinks because the sugar content is so much that it causes diabetes.
An increase in prices of alcohols and tobacco would curb its sales and its consumption by addicts. Excessive smoking of tobacco and consumption of alcohol are responsible for serious health hazards among users.
I am in support of it and it is my wish that government should place a total ban on the consumption of tobacco and other related substance in public places because they area major cause of cardiovascular disease that could lead to instant death for consumers. Stakeholders in the food, drink and drug businesses in the country should be educated on the negative effects of consuming these substances. Lack of proper regulation over the years has led to the death of many Nigerians from food poisoning, excessive drug use and inappropriate application of drugs. If stakeholders know that there are effective laws that will bring them to book when they cross the line, more lives will be saved. The government has just taken a step in the right direction because this will affect the street sales of tobacco and even alcohol.
The newly approved duty hike for tobacco and alcoholic products couldn’t have come at a better time than now when government is caught in-between discouraging youths from excessive consumption of hard substance and the quest to expand her revenue sources.
This new policy of the government will increase the cost of production and if that happens employers would have to look for a way to cut cost; workers will be the first to suffer it. The new tariff would be adding a bigger challenge to the sector that is barely managing to survive amid the present economic challenges in the country. It will also escalate the smuggling of alcohol and cigarette products. It was recently reported that the British American Tobacco (BAT) has just decided to make Nigeria its African headquarters where all its products for other African countries would be produced. This policy may cause may cause the company to relocate to another African country with a much more favourable business environment. In other words, the drive towards foreign direct investment will be impacted negatively as no investor likes to invest in an economy with low returns on investment.Ultimately some of the affected companies will eventually shut down. What the government should do is to come up with a policy that will discourage employers from downsizing, but before they can do that excise duty has to be reasonable.
This increase means additional financial burden on the people involved in the business of selling tobacco and alcohol which will be transferred to the final consumers.The government did not put the latter into consideration before increasing the duty on alcohol and cigarette. Iat will also discourage the importation of the said goods.
Copyright 2017 Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.