Some members of the organised private sector yesterday kicked against the federal government’s introduction of an excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages in the country.
They argued that the policy would be an additional cost burden to producers of the product, and expressed concerns that it might lead to job losses.
The Manufacturers Association of Nigeria (MAN); Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA); Lagos Chamber of Commerce and Industry (LCCI); and Centre for the Promotion of Private Enterprises (CPPE) said they were worried by the deleterious economic consequences of the new excise duty.
MAN lamented that despite the obviously overwhelming negative effect, the federal government was more interested in the revenue gains from the excise duty and was only trying to explain away the bad policy by linking it to citizens’ health.
The association stated that the reintroduction of the excise duty would cause the beverage sub-sector of the food and beverage industry to lose up to N1.9 trillion in sales revenue between 2022 and 2025. This, it estimated, would be a 39.5 per cent loss, due to imposition of new taxes with concomitant effect on jobs and supply chain businesses.
According to Director General of MAN, Segun Ajayi-Kadir, the revenue aspirations of government in introducing the excise may not be justified in the long-run.
Ajayi-Kadir stated, “Let us look at it this way: the government is estimated to generate an excise tax of N81 billion between 2022 and 2025 from the group. This will not be sufficient to compensate the corresponding government’s revenue losses in other taxes from the group.
“For instance, the corresponding effect of reduced industry revenue on government revenues is estimated to be up to N142 billion contraction in Value Added Tax (VAT) raised by the sector and N54 billion Company Income Tax (CIT) reduction between 2022 and 2025.
