To arrive at the estimates for the three countries (Malawi, Mozambique and Nigeria), the research used the following data sources and methodology:-

- • estimation of revenue gains due to introduction of local excise rate on luxury items is • estimation of revenue gains due to introduction of local excise rate on luxury items is desirable, tax revenue figures per excisable product was difficult to find in the countries under study. This is probably due to the sensitivity of such tax data.
- • such, we relied on imported luxury items whose values were easy to find on publicly available • such, we relied on imported luxury items whose values were easy to find on publicly available World Bank's WITS UN COMTRADE International Trade Centre international trade databases like , and (ITC) databases. Furthermore, the import tax rates (i.e. Import duty, import excise and import VAT) were easily accessible on the websites of the revenue administrations of the countries under study. The availability of such data in international trade permitted estimations of revenue gain due to introduction of import excise rates on luxury items. This approach is also justified because the three countries are net importers of luxury consumables.
- • to Bernard (2008) and Zhou & Yang (2013), luxury goods are non-essential and • to Bernard (2008) and Zhou & Yang (2013), luxury goods are non-essential and dispensable items whose demand increases with increase in income and at times the increase in demand surpasses that of income. Thus, in economic theory, a luxury item has income flexibility of greater than 1. As highlighted by Deloitte (2019) the consumption of luxury items continues to be on the rise, hence providing an opportunity to progressively raise revenue through excise taxation.
- • standard list of luxury items was identified from two main sources: firstly, the already • standard list of luxury items was identified from two main sources: firstly, the already 26 excisable goods in the Customs and Excise tariffs books of the countries under study and a survey from the literature. Furthermore, it was almost impossible to get baseline data i.e. tax revenue on locally excised goods in the three countries under study. Otherwise, the rich people in the three countries locally consume goods like; beers, wines, spirits, electronics like smartphones and Television sets, vehicles, petroleum fuels, canned and preserved foods, meat as well as sweet and savoury snacks.
- • products were identified and grouped according to Harmonised Commodity Description and • products were identified and grouped according to Harmonised Commodity Description and Coding System (HS code) 4 digit level. In order to ensure that the estimations of tax revenue 27 gains are done in a progressive manner, products affecting the poor were excluded. After identifying the products
- • respective import values were obtained from ITC database. The year 2017 was used as it • respective import values were obtained from ITC database. The year 2017 was used as it is the most recent year in which reliable data is available.
- • the countries under study, calculate the import taxes on CIF basis. Therefore, the values • the countries under study, calculate the import taxes on CIF basis. Therefore, the values obtained from ITC were used as values for duty purpose (VDP).
- • the countries' Customs and Excise Tariffs books and following Pelikan & Brockmeier • the countries' Customs and Excise Tariffs books and following Pelikan & Brockmeier (2008), we calculated simple average/un-weighted tariff rates (i.e. import duty, import excise and import VAT) for each product group identified. As lamented by Bach et al (2001), the problem with simple average/un-weighted tariff rates is that they do not consider the relative importance of specific disaggregated tariff lines in the product groups. Instead Manole & Martin (2005) propose use of trade weighted average tariffs. Nevertheless, we opted for the former due to data constraints i.e. trade values are available only up to HS6 yet the countries under review trade at HS 8 like Malawi and HS10 like in the case of Nigeria. Thus, it would require us to obtain transaction level trade data from the countries and this proved difficult.

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