Nigeria: Stop Tobacco Subsidy, CAT Urges Govt

Source from:  Vanguard (Lagos) 11 January 2008 01/14/2008

COALITION Against Tobacco (CAT) has stated that the truth about tobacco companies operations in Nigeria is that they are being subsidised by our own government. It said tobacco companies have closed down their operations in Ghana and Mali,but noted that they are scaling up their operations in Nigeria. CAT explained that there is just one thing responsible for this action, "they are enjoying generous tax waivers from our government." ERA on its own said "there is a policy of government called the EEG; under the policy any Nigerian company that produces for export, when it remits the money, the company is entitled to 30 per cent of your remittance. The money is added to your money Tobacco companies are importing tobacco leaves into Nigeria; they are actually importing at 5% duty rate; they import at 5% duty rate take it to their factory to process into cigarettes without any duty and their equipment came into the country through zero duty because of the concessions they got under the last administration; then they export and are entitled to 30 per cent EEG as grant by the Federal Government. That is the reason why tobacco companies are falling over themselves to have factories in Nigeria." ERA, which spoke through Akinbode Oluwafunmi noted that tobacco companies even "from their own side, have confirmed that their staff is 1,100 and that they have plan to employ 100 more. Let us assume they have employed that 100. That means that their staff strength today is just 1,200." He said for a company to "benefit from the EEG that company must be a Nigerian company." ; these tobacco companies are not Nigerian companies. We begin to wonder why they should benefit this generously? The 30 per cent EEG policy is for local production for export. These tobacco companies are now using Nigeria as their manufacturing base; it simply means that Nigeria is now subsidising topography of the West African sub-region. They should remove tobacco companies from all waivers and they should cancel all concessions granted to them under the last administration." Enditem