The Manufacturers Association of Nigeria has warned that new excise duty of N10 per litre imposed on non-alcoholic, carbonated and sweetened beverages carbonated drinks would be counter-productive.
During the public presentation of the 2022 budget on Wednesday in Abuja,The Minister of Finance, Budget and National Planning, Zainab Ahmed stated that an excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages.
This is to discourage excessive consumption of sugar in beverages which contributes to a number of health conditions including diabetes and obesity. But it is also used to raise excise duties and revenues for health-related and other critical expenditures.
The Director-General of MAN, Segun Ajayi-Kadir reacting to the federal government’s decision in a report titled ‘key considerations against excise on non-alcoholic beverages’ stated
According to him, the new imposed excise duty would cause the beverage sub-sector of the food and beverage industry to lose up to N1.9tn in sales revenue between 2022 -2025, due to the imposition of the new taxes with simultaneous adverse effects on jobs and supply chain businesses.
He warned that the excise duty tax would affect the sub-sector, which has contributed significantly to the economy and taxes, despite the debilitating effects of naira devaluation, inadequacy of forex, and the COVID-19 pandemic.
“The revenue aspirations of the government in introducing this excise may not be justified in the long run. Let us look at it this way. The government is estimated to generate an excise tax of N81bn between 2022-2025 from the group. This will not be sufficient to compensate the corresponding government’s revenue losses in other taxes from the group.”
He also said the move might lead to employee salary reduction, retrenchment, and general increase in prices of goods.
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