Friday, February 15
AM / Deloitte
The Federal Government of Nigeria (“FGN”) has, via a Circular dated 7 February 2019 (“the Circular”), revised the excise rate on products classified under tariff heading (TH) 22.06. These products (together referred to as “the Affected Products”) are:
The prescribed rates for the Affected Products are ₦0.30K per centilitre effective from 4 June 2018 to 3 June 2019 (i.e. the first year) and ₦0.35K per centilitre from 4 June 2019 (i.e. the start date of the second year).
The new excise rates represent a significant reduction in the excise rates for the Affected Products. Prior to the Circular, beverages with relatively lower alcohol content (than beer and stout), paid excise at a rate as high as ₦1.50 per centilitre.
This was based on a circular issued in March 2018 and referenced 17642/II/172 (“2018 Circular”) which introduced a new excise regime (effective 4 June 2018). This regime generally increased the excise chargeable on excisable products (i.e. tobacco and alcoholic beverages) and changed the basis of levying excise from ad-valorem to specific.
With this reduction in excise rates for the Affected Products, the Circular has the following practical effects:
The Circular nonetheless raises some practical concerns namely the need to:
We are not unaware that there may be some manufacturers who may not have remitted excise on the Affected Products during the period 4 June 2018 to 7 February 2019.
Whilst this Circular by the FGN is laudable, it is not in doubt that the revision it makes to the excise rates would adversely impact potential FGN earnings. It is, however, our view that such adverse impact should be outweighed by the relief to manufacturers and consumers affected by this Circular.
Download Here – Summary Of The Current Excise Rates
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