The World Bank has revealed Nigeria can earn N600bn annually from tax hike on tobacco and alcohol as recommended by the reports of the National Development.
A Senior Tax Specialist, Rajul Awasthi revealed this on Thursday at a virtual discussion on domestic revenue mobilisation.
He called on the Federal Government to adopt the excise standards for tobacco and alcohol recommended by the ECOWAS or Kenya to boost the country’s revenue from tax.
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.
“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.”