Why Nigeria must rethink the hybrid Excise Stamp policy

Nigeria must reconsider its hybrid Excise Stamp policy, according to a report analyzing the new excise stamp regime. The Nigeria Customs Service Excise Stamp Regulations, 2026, aim to improve traceability, accountability, product authenticity, and digital monitoring while curbing illicit trade. However, the report argues that the choice of technology and integration into existing systems are crucial factors in determining the effectiveness and economy of the system.

While the Customs Service's B’Odogwu Automated Excise Register System and the Federal Inland Revenue Service's e-invoicing platform provide digital records of excise operations, production, and sales, the association raises concerns about potential duplication of functions already invested in. These platforms may serve different immediate purposes, with e-invoicing focusing on immediate transactions and the excise register providing production data.

Before implementing the hybrid system, the government should conduct a systems audit to assess the capabilities of existing platforms. This includes comparing the data captured by the B’Odogwu system, the information available through e-invoicing, and the reconciliation of production volumes, excise obligations, and product movements across platforms.

Identifying gaps in real-time monitoring, the costs of closing these gaps through integration rather than a standalone arrangement, and the potential for institutional interoperability are all important considerations.

The report emphasizes that both physical and digital components of the hybrid system must be evaluated based on measurable criteria, such as authentication accuracy, resistance to fraud, ease of verification, implementation cost, production-line speed, data security, and interoperability. While a physical security feature may provide a demonstrable advantage in certain circumstances, a digital identifier linked to a secure, interoperable database can deliver the same results at a lower cost.

The government should be cautious about adopting international claims without examining the context and the design of the proposed system.

Before mandating a mandatory system across relevant product categories, the authorities should publish a technical and economic assessment comparing the proposed model with feasible alternatives. This assessment should include a clear baseline against which performance can be measured, such as current revenue leakage and detection rates. By focusing on evidence-based decision-making, Nigeria can ensure that the new excise stamp policy is both effective and economical.