Suspension of Hike in Beverages, Tobacco Excise Duty Gladdens MAN

By Starrys Obazei | April 5, 2023

The Manufacturers Association of Nigeria, the MAN, has lauded the Federal Government’s decision to halt the proposed increase in excise duty on alcohol, non-alcoholic beverages, and tobacco.

It also praised the government for allowing the 2022-2024 Federal Government Sectoral Roadmap to run its full course.

In a statement, the Director General of the association, Segun Ajayi-Kadiri released the information to journalists on Tuesday.

As part of a new policy, the duty introduced in the Finance Act was signed into law by the President, Major General Muhammadu Buhari (retd.), in December 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 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.

It noted that a major setback that plagued the productive sector in 2022 was the introduction of an excise duty of N10 per liter on all non-alcoholic, carbonated, and sweetened beverages in the country.

“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,” Ajayi-Kadir said.

However, the association described the halt on excise duty as a relief to its members across the Federation, promising to signpost the Federal Government support for the sustenance of manufacturing in Nigeria.

“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 Beverages 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 the Government on the introduction of a 0.5% Import surcharge, which is meant to fulfill Nigeria’s obligations to the continental agreement in the implementation of the 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,” the statement read

The association added that it looks forward to improved performance of the manufacturing sector and the economy as it continues to engage the government meaningfully on matters bordering on the nation’s economic prosperity.

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