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Group heads to court as FG okays new excise rates for tobacco, alcoholic beverages

By Emmanuel Elebeke

ABUJA — President Muhammadu Buhari at the weekend approved an amendment to the excise duty rates for alcoholic beverages and tobacco with effect from today, Monday, 4th June, 2018.

The President has also granted a grace period of 90 days (three months) to all manufacturers before the commencement of the new excise duty regime.

Meanwhile, a  Non-Governmental Organisation,  Business Renaissance Group,  has approached  a  Federal High Court sitting in Abuja to restrain the Minister of Finance Mrs. Kemi Adeosun from implementing the  increase in tariffs

Announcing the amendment to excise duty rates in Abuja, the Minister of Finance, Mrs. Kemi Adeosun, stated that the new excise duty rates were spread over a three-year period from 2018 to 2020 in order to moderate the impact on prices of the products.

The Minister disclosed that the new excise duty regimes followed all-inclusive stakeholder engagements by the Tariff Technical Committee of the Federal Ministry of Finance with key industry stakeholders.

According to her, the upward review of the excise duty rates for alcoholic beverages and tobacco was to achieve a dual benefit of raising the Government’s fiscal revenues and reducing the health hazards associated with tobacco-related diseases and alcohol abuse.

“The Tariff Technical Committee (TCC) recommended the slight adjustment in the excise duty charges after cautious considerations of the Government’s Fiscal Policy Measures for 2018 and the reports of the World Bank and the International Monetary Fund Technical Assistance Mission on Nigeria’s Fiscal Policy.

“The effect of the excise duty rates adjustment on trade and investment was also assessed by the Federal Ministry of Trade and Investment and it adopted the recommendations of the TTC. Furthermore, peer country comparisons were also carried out showing Nigeria as being behind the curve in the review of excise duty rates on alcoholic beverages and tobacco,” she   said.

* Group heads to court to stop implementation

Meanwhile, a Non-Governmental Organisation, Business Renaissance Group, has approached a Federal High Court sitting in Abuja to restrain the Minister of Finance Mrs. Kemi Adeosun from implementing the increase in tariffs.

Recall that the group had in May staged a protest at the National Assembly, labeling the new tariffs, ‘Killer Taxes on alcohol and beverages’.

In an Originating Summons, the group asked the court to make an order compelling the Minister and her agents while reviewing any tariffs, to take into consideration, the interest of the Plaintiffs, the generality of the citizens and the clear intendments of the Constitution of the Federal Republic of Nigeria with regard to growing a robust and all inclusive economy for the good of all Nigerians as a fundamental obligation of Government.

The plaintiffs are also seeking a declaration that the increment of the tariff duty on alcoholic beverages and tobacco is against public policy and not in tandem with the intention behind sections 16 and 42 of the Constitution of the Federal Republic of Nigeria, 1999 as amended. They therefore requested the Court to make a declaration that the phenomenal increment of tariff duties on alcoholic beverages and tobacco is indefensibly and unjustifiably selective, discriminatory, unreasonable and unfairly oppressive of a particular segment of the Nigerian society and the Plaintiffs in particular, who use the affected products and whose means of livelihood are threatened by the new oppressive tariffs.

The plaintiffs are also seeking a declaration that a selective and arbitrary increase in commodity tariffs targeted only at a particular section of economy players and users in the Country and with the aim of shrinking that economic segment, amounts to economic and social emasculation of the citizens affected and is ipso facto against public interest and is therefore unconstitutional. And a declaration that the propagation and enforcement of said discriminatory and oppressive tariffs is an act of executive bad faith, recklessness and is not a bona fide or positive exercise of governmental power and therefore runs contrary to the raison d’etre of governance – as made clear in the constitution of the Federal Republic of Nigeria.

The suit brought unbehalf of the plaintiffs by Christian Hon from the Law firm of J-K Gadzama (SAN) is coming after the expiration of a 30-day ultimatum given to the Finance Minister to rescind the hike in tariffs on Alcoholic beverages and Tobacco or face legal action by the Business Renaissance Group. It also seeks the determination, by the Court, that the increase in the tariff on alcohol beverages and tobacco is discriminatory, oppressive and against public policy bearing in mind the provisions of sections 16 and 42 of the constitution of the Federal Republic of Nigeria 1999 as amended.

The Business Renaissance Group had at a Press Conference in Abuja on Tuesday April 17, 2018 condemned the hike as insensitive, draconic and that done without consulting the critical stakeholders. It averred that the hike has the potential to create loss of revenue by Government, mass sack of Nigerians working in the Beverage and Tobacco industries, dumping of cheap imports as well as likely health challenges occasioned by the resort to cheap and unhealthy wines and spirits by those who will not be able to afford the likely price increase which the hike in tariff will necessitate.

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