MAN LAUDS FEDERAL GOVERNMENT’S DECISION TO HALT THE PROPOSED INCREASE IN EXCISE DUTY ON ALCOHOLIC, NON ALCOHOLIC BEVERAGES, TOBACCO

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…To Allow the 2022-2024 Federal Government Sesctoral Roadmap to Run Its Full Course. 

Preamble

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.

The 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, Hajiya 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.

Although the projected 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. 

The Manufacturers Association of Nigeria 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.

Recent Outcomes

The palpable apprehension in the concerned sector necessitated another courtesy visit and presentation to the Honourable Minister of Finance, Budget and National Planning by a delegation of the Manufacturers Association of Nigeria. The delegation was led by the President, Otunba Francis Meshioye and the outcomes allayed the fears of MAN. The Honourable Minister reassured the delegation of Government’s commitment to the wellbeing of the manufacturing sector and the concerned sector in this instance.

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.

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