Nigeria to effect higher taxes on e-cigarettes, shisha, others June 1

The Federal Government of Nigeria has announced that the new e-cigarettes tax regime will be implemented from 1 June 2022.

The announcement was made by Fatima Hayatou, Director of Technical Services at the Federal Ministry of Finance, during a meeting with the Civil Society Centre for Legislative Advocacy (CISLAC).

Democratic Governance Program Manager Okeke Anya leads the organization’s Tobacco Tax Working Group.

Hayato described the tobacco industry as a strong one, ensuring the ministry was committed to stopping the illicit flow of products into the market.

She hinted that plans are underway to involve relevant stakeholders in implementing a robust traceability system.

The government will set up a tobacco tax working group to study what other ECOWAS countries are doing.

Director Fatima Hayatou said the tax on one cigarette was N2.90 kobo, but it has now been increased to N4.020.

This follows the ECOWAS recommendation of 0.02 cents per cigarette, which would be equivalent to 8 naira and 40 packs at current exchange rates.

“However, we agree with the compromise proposal to implement the N4.20kobo standard from 2022.

“Then in 2023, an additional 50 kobos will be added to reach a 4 Naira zero 70 kobo, and then in 2024, an additional 50 kobos will be added to make it a 5 Naira zero 20 kobo (N5.20 kobo).

“These will all reflect the current increase from 20% to 30% ad valorem. This is a gradual increase in tax and is currently under review.

“The increase in taxation/taxation applies not only to tobacco products but also to other products such as hookahs, similar products, other equipment used to transport and consume tobacco.

“Hookah will also be taxed at N3,000 per litre and N1,000 per kilogram, which will increase by N500 per year,” Hayatu revealed.

In his speech, Anya urged the federal government to include hookahs and other electric smoking devices in the new tobacco tax system.

CISLAC officials said this would destroy their demand and increase the state’s revenue.

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

“Increasing taxes will be the way to generate revenue. That’s how many countries operate because tobacco consumption is a luxury, not a necessity,” he said.

Anya insists that citizens want to know which tobacco products have been properly taxed and where they come from.