Policy Brief & Alerts

January 25, 2019

Simulation of the Effect of Tax Increase

In June 2018, Nigeria introduced a new tax regime on tobacco products. In addition to the present 20% ad valorem excise duty charged on locally produced goods, tobacco products will now attract a specific duty of ₦20 per pack, which will rise to ₦40 and ₦58 in 2019 and 2020 respectively. Given government’s decision to […]

Download Label
March 13, 2018 - 4:00 am
application/pdf
680.77 kB
v.1.7 (stable)
Read →

In June 2018, Nigeria introduced a new tax regime on tobacco products. In addition to the present 20% ad valorem excise duty charged on locally produced goods, tobacco products will now attract a specific duty of ₦20 per pack, which will rise to ₦40 and ₦58 in 2019 and 2020 respectively. Given government’s decision to adopt tobacco taxation as part of broader tobacco control measures, we examine the potential impacts of this new policy as well as other recommended changes in the tobacco tax levels.




Related

 

Nigeria Economic Update (Issue 39)

Nigerias external reserve fell marginally by from $25.36 billion to $25.16 billion. The decline likely reflects the continued sales of dollar by CBN amid fall in oil revenue. Similarly, the naira/dollar exchange rate depreciated marginally by 0.5 percent to N424/$ at the parallel segmentas also seen in preceding weeks. The continued depreciation likely points to banks low level compliance to CBNs dollar sales directive made in August, 2016, thus creating artificial dollar scarcity in the parallel market.

Nigeria Economic Update (Issue 44)

Latest Doing Business report by the World Bank ranks Nigeria as one of the top 10 economies that showed notable improvements in doing business in 2016/2017. Precisely, the report which presents quantitative indicators on business regulation compared across 190 economies and ranked Nigeria 145th - up by 24 positions from the previous report ranking, to reach its highest rank since 2013. This may not be unexpected, given that it is consequent upon various business environment reforms in 2016. Particularly, the Presidential Enabling Business Environment Council (PEBEC) set up in 2016 enacted 31 reforms to improve business(such as improving credit to small and medium-size businesses) all of were enacted into law in May 2017.

Nigeria Economic Update (Issue 26)

The All-Share index (ASI) and Market Capitalization both depreciated (week-on-week) by 1.45 percent for the second consecutive trading week- June 3, 2016 to June 10, 20166. ASI depreciated by 401.8 points from 27,634.42 points to 27,232.62 points, while Market Capitalization declined by N140billion from N9.49 trillion closing the week at N9.35 trillion. All other indices declined, with the exception of NSE ASem Index, NSE Insurance Index, and NSE oil/Gas Index. The delay in the implementation of proposed forex policy continues to adversely affect stock market performance. However, with growing speculations that the new FOREX guidelines would be released in the succeeding week, market indices could perform better subsequently. Hence, monetary authorities should ensure the timely release and implementation of the new FOREX policy to boost investors confidence in the near term and ensure price stability in the capital market.