Increased excise duty rates on tobacco, alcohol will affect hospitality industry negatively – Association

The Lagos Hoteliers Association on Tuesday appealed to the Federal Government to revisit the increment in excise duty rates on tobacco and alcoholic drinks.
The association said that the implementation of the policy would have negative effects on the industry as many might not be able to break even.
The secretary of the association, Jamiu Talabi, disclosed this to the News Agency of Nigeria in Lagos.
Talabi said that any increment on excise duty rates on those commodities would hike costs being charged by hoteliers from their consumers.
He said that tobacco and alcoholic beverages were the essential products of the hospitality business.
He said: “The hospitality industry will be greatly affected with the review of the excise duty rates as the items will definitely become more expensive.
“Before now, we were trying to remain in business due to problem of multiple taxation.
“The new increment in prices of alcoholic drinks and tobacco will aggravate the problem for us.
“It is unfortunate that this is coming at a point when practitioners are finding it extremely difficult to break even.
“This is a period that we are battling with all sort of taxes and levies from the three tiers of government.’’
He said that the review could also result in loss of jobs.
He stated that some hoteliers would have to relieve some of their staff members to be able to break even in business due to perceived drop in patronage.
NAN reports that the Federal Government through the Minister of Finance, Kemi Adeosun, announced an upward review in excise duty rates on alcoholic beverages and tobacco in March 2018.
The government, however, said that its enforcement would be from June 4.
Adeosun said that the new rates were spread over a three-year period from 2018 to 2020 in order to moderate its impact on prices of the affected products.
According to her, with the newly approved rates for tobacco, each stick of cigarette will attract a N1 (N20 per pack of 20 sticks) in 2018 beside the 20 per cent ad-valorem rate.
Each stick will attract N2 (N40 per pack of 20 sticks) in 2019 and N2.90k specific rate per stick (N58 per pack of 20 sticks) in 2020.
She said that the new specific excise duty rates for alcoholic beverages would also cut across beer and stout, wines and spirits for three years vis: 2018 to 2020.
Adeosun said: “Beer and stout will attract N0.30k per centilitre (Cl) in 2018 and N0.35k per Cl each in 2019 and 2020. Wines will attract N1.25k per Cl in 2018 and N1.50k per Cl each in 2019 and 2020.
“Spirits will attract N1.50k per Cl for 2018, N1.75k per Cl in 2019 and N2.00k per Cl in 2020.’’
NAN reports that the upward review of the excise duty rates for alcoholic beverages and tobacco by the Federal Government is to achieve dual benefits.
The upward review is to raise government’s internally generated revenue, as well as reduce health hazards associated with tobacco-related diseases and alcohol abuse.