Revenue generation: ECOWAS to increase duties on tobacco, unhealthy products

ABUJA- Vice President of the ECOWAS Commission Mr Edward Singhatey at the weekend said that ECOWAS is set to increase excise duties on tobacco and other unhealthy products to increase revenue generation and reduce consumption of such products in the sub-region. 
ECOWAS Parliament
This formed part of the aims of the meeting of the ECOWAS Financial Council of Ministers in Abuja, He explained that An excise duty is a type of tax charged on goods produced within the country, as opposed to customs duties, charged on goods from outside the country. 

Singhatey said that member states had begun working on a draft directive to harmonise excise duties on tobacco products.Singhatey added that the draft would include the legislative and regulatory provisions of member states in tracking and tracing mechanisms related to tobacco products .

“This in order to facilitate the smooth running of the domestic market of tobacco products and ensure compliance with the obligations of member states under the World Health Organisation Framework Convention on Tobacco Control and the Protocol to Eliminate Illicit Trade in tobacco products. 

”He said member states had a duty to establish efficient tax collection measures and explore sources of tax revenue. 

He, therefore, said that the meeting would also consider the draft document to establish an ECOWAS Customs Code aimed at harmonising customs legislations in the sub-region, in line with international requirements. 

“It is important that customs procedures are modernised and simplified so that they do not become obstacles to legitimate trade and oppressive to the very society in which they operate. 

“Experts in customs procedures agree that it is possible to maximise revenue collection and at the same time facilitate legitimate trade and protect the society. 

”The commission’s vice president also said that member states had developed a draft Institutional framework for the monitoring and steering of the ECOWAS Fiscal Transition Programme. 

The programme was designed to facilitate mobilisation of domestic resources for development, monitor the fiscal coordination of domestic taxes and eliminate double taxation. 

Singhatey also said it was pertinent for member states to work on the harmonisation of Value Added Tax (VAT) exemptions to ensure “equal treatment of all economic operators in the Community” .

In her address, Nigeria’s Minister of Finance, Kemi Adeosun said that the Federal Government “identified with the ECOWAS position on excise tax on some products”. 

Adeosun, represented by the Permanent Secretary, Mr Mahmoud Dutse, said the government was currently putting in place policies to increase excise tax on tobacco, alcohol and other products. 

The minister said that the Federal Government had also begun reviewing its excise tax rates and structure on tobacco, cigarettes and alcoholic beverages. She added that this was in line with the ECOWAS draft regulation on harmonisation of excise taxes on tobacco.

 “One of the techniques used by governments all over the world is to tax products that are either consumed particularly when you want to do progressive taxation, or products that are hazardous to health and increase health spending. 

“It is a twin objective; to raise revenue and decrease the quantity of tobacco consumption.

“In this regard, the use of modern techniques and tools of production controls such as tax stamps or special package markings in the context of the track-and-trace system, which is a global best practice, are being considered. 

“The harmonisation of laws establishing a system for tracing, tracking and tax verification of manufactured or imported tobacco products in ECOWAS member states is a welcome development for Nigeria. 

“Adeosun said it was important for member states to put in place effective track-and-trace systems to eliminate illicit trade. 

“Without an effective track-and-trace system, illicit trade will undermine trade and tax measures and will have serious adverse effects on public health in West Africa. 

“Nigeria supports the ECOWAS directives of VAT exemptions on basic food items in their raw states, medicaments and pharmaceutical products.”She further expressed the government’s support for the ECOWAS Customs Codes adding that it was part of efforts to enhance the implementation of a common tariff and promote a common market for West Africa.

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