STUDY ON EFFECTS OF INCREASED TOBACCO TAX ON TOBACCO CONSUMPTION AND AFFORDABILITY IN NIGERIA (2nd Edition)
The world Health Organization- Framework convention on tobacco control (WHO-FCTC) notes that effective tobacco taxes are important to reduce tobacco consumption and prevalence. In line with the FCTC, Nigeria’s National Tobacco Control Act ( NTC Act) 2015 in section 43 urges the Government of the Federation and its Ministries, Departments and Agencies to implement tax policies, strategies, programmes or other fiscal measures which promote the objective of the act and in accordance with the Framework Convention on Tobacco Control, its implementing guidelines and protocols.
Nigeria in June 2018 increased taxes on tobacco (cigarettes). Prior to this time, taxes were only on Ad volarem of 20% without specific taxation on tobacco (cigarettes). Effective 4th June 2018, in addition to the 20% Ad volarem, specific taxes for cigarettes were made as follows;
• #20 for a pack of 20 sticks in 2018
• #40 for a pack of 20 sticks in 2019
• #58 for a pack of 20 sticks in 2020.
The increase may not amount to much if the health consequences are not affected positively. It is in with this line that it becomes important to interrogate how far the increase have had effect on affordability and consumption of tobacco products.
In 2019, CISLAC published a research report on the effects of increased tobacco tax on tobacco consumption in Nigeria midway into the implementation of the tobacco tax regime where increase of #20 and #40 were imposed in 2018 and 2019 respectively. In examining the impact of the tax policy changes on affordability and consumption, the study found that tobacco prices have increased at a slower rate relative to income growth over the review period, hence, recommending for policy makers to pay closer attention to changes in income growth vis-à-vis changes in tax rate. This follow-up study is therefore seeking to find the impact of the #40 increase in the 2nd half of 2019 and #58 increase in 2020 on affordability of the product.
B. PURPOSE OF THE CONSULTANCY
With the implementation phase of the tax regime now in its final year, this consultancy seeks to review the legal and policy context of tobacco taxation as well as the broader environment of the tobacco sector. More specifically, this consultancy seeks to conduct a follow up study on effects of the tobacco taxation policy on tobacco consumption in Nigeria.
It is widely recognized that an effective tax system can not only contribute to revenue generation but also regulate economic activities and decisions. Within the tax campaign, reference is made to the 4 R’s of taxation including 1) Revenue generation 2) redistribution 3) Representation 4) Repricing.
In the context of tobacco tax advocacy, a well-designed tax system can be used to reprice the cost as a measure to control and discourage tobacco consumption. 181 countries are parties to the World Health Organization (WHO) Framework Convention on Tobacco Control which recognizes the centrality of raising tobacco taxes as a critical measure to mitigate the damaging impacts of tobacco consumption. CISLAC is working with other partners in Africa within the Tax Justice Network Africa to push the bar on tobacco control through advocating for the use of price and measure to reduce tobacco prevalence. Thus, CISLAC is engaging in this study to interrogate the current tobacco tax regime on tobacco consumption to inform advocacy for upward review of tobacco tax in Nigeria.
The result of the study will inform the advocacy process for the project. It is anticipated that the study will generate accurate and reliable data that will not only be a critical part of the advocacy process but also provide broad information for tobacco and related sectors in the production, distribution, consumption chain.
C. SCOPE OF THE WORK
The overall objective of the consultancy shall be to review selected relevant existing document on tobacco taxation and consumption in Nigeria with a comparative regional and global perspective. This will subsequently be supported with primary data as will be necessary to further build evidence for the project advocacy objective. The consultancy shall be guided by the following specific tasks.
THE SPECIFIC TASKS INCLUDE:
1. Review existing data and document on tobacco taxation and consumption in Nigeria
2. Review the ongoing tobacco tax regime and show link between the increase and affordability
3. Review measure aimed at controlling tobacco consumption in Nigeria.
4. Review Nigeria Tobacco taxation regime against international best practices
5. In close consultation with CISLAC, identify the key stakeholders in the sector for the purposes of the study as well as subsequent advocacy process.
6. Undertake primary data collection to generate further and new supporting information on the areas of the study. This process should include the views of relevant stakeholder working in the area of tobacco production and /or control
7. Develop a clear and analytical report with relevant recommendation for both tobacco taxation and consumption control advocacy intervention
8. Present the finding of the study to stakeholders
1. Inception Report
2. Data collection and reporting schedule
3. Draft report
4. Power point presentation
5. Final report
REMUNERATION / CONSULTANCY FEES
The consultancy fee is negotiable. Please note that withholding tax will be deducted from agreed amount in line with the country’s tax requirement.
The consultant shall be paid 20% on signing of the TOR, 40% on submission of draft report and 40% upon satisfactory completion of the tasks and submission of final report
The consultant shall report to the Programme Manager – (Democratic Governance) Civil Society Legislative Advocacy Centre (CISLAC)
Submission of Final Report: The consultancy shall become effective upon agreement by both parties and run for a period not exceeding six weeks from the date of signing the contract
Interested consultants should submit their CVs (max. 4 pages) and financial offer via email to email@example.com copying firstname.lastname@example.org not later than 19th June 2020.
For further information about the assignment, please contact 07088830030.