The Manufacturers Association of Nigeria (MAN) has commended the federal Government for stopping the implementation of proposed increase in excise duty on alcoholic, non-alcoholic beverages and tobacco as well as allowing the 2022-2024 federal government sectoral roadmap to run its full course.
In a statement signed by the Director General, Segun Ajayi-Kadir, MAN noted that a major setback that plagued the productive sector in 2022 was the introduction of an excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages in the country.
Recall that the duty charge was part of a new policy introduced in the Finance Act, which was signed into law by President Muhammadu Buhari on December 31, 2021, alongside the 2022 Appropriation Bill.
According to the Minister of Finance, Budget and National Planning, Zainab Ahmed, the new sugar tax was introduced to raise excise duties and revenues for health-related and other critical expenditures in line with the 2022 budget priorities.
MAN noted that although the expected revenue was projected at N81bn from 2021-2025, the potential loss to government in other forms of taxes and revenue cut leaves much to be desired.
According to the statement, MAN through series of advocacy channels warned that a new tax imposed on carbonated drinks and others would be counter-productive and that government should devise other means of generating revenue rather than inadvertently stifling the productive sector which is already struggling.
“Still grappling with a recent increase in line with a three-year roadmap, the proposed increase in Excise on Beer, Wines and Spirits, Tobacco and Non-Alcoholic Beverages in 2023 became another nightmare to a sector gasping for survival amidst evident setbacks occasioned by Naira scarcity, forex crunch, infrastructure deficit but to mention a few.” The statement read.
The MAN DG said following palpable apprehension in the sector, a delegation of the Manufacturers Association of Nigeria, led by the President, Francis Meshioye paid a courtesy visit to the Minister of Finance, Budget and National Planning and made a presentation to her.
According to Ajayi-Kadir, the outcomes of the visit allayed the fears of MAN as the Minister reassured the delegation of Government’s commitment to the wellbeing of the manufacturing sector and the concerned sector in this instance.
The statement read in part, “The Association is gladdened by the assurances of the Honourable Minister, Hajiya Zainab Ahmed that the 2023 Fiscal Policy Guidelines and the reconsideration of the Finance Act 2023 have been concluded and would be released immediately.
“In specific terms, she assured that the guidelines would not include the proposed increase in Excise duty on Beer, Wines and Spirits, Tobacco and Non-Alcoholic Beverage in 2023, but rather allow the Excise regime to run its full course from 2022 to 2024 as programmed in the Road Map by the Federal Government in 2022.
“This comes as a huge relief to our members across the Federation and will signpost the administration’s support for the sustenance of manufacturing in Nigeria on this score.
“Furthermore, MAN received the understanding of Government on the introduction of 0.5% Import surcharge, which is meant to fulfill Nigeria’s obligations to the continental agreement in the implementation of Africa Continental Free Trade Area (AfCFTA) agreement, as well as the promised intervention on resolving the logjams in the interpretation of the Tin Plate, HS Code 7210. 12.00.00 with the Nigeria Customs Service.
“From the foregoing, the Association views the Federal Government’s move as one that will encourage our members who are currently struggling with unprecedented low sales, forex squeeze, inadequate electricity supply and multiple taxes and levies from the three tiers of government.
“This move will reassure members of the administration’s respect for stakeholder’s engagement and the usefulness of public-private sector dialogue.
“As MAN continues to engage with government meaningfully on matters bordering on the nation’s economic prosperity, we look forward to improved performance of the manufacturing sector and the economy.”