Manufacturers Association of Nigeria has condemned the introduction of excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages stating that it will make Nigeria lose investments to other countries.
Minister of Finance, Budget and National Planning, Zainab Ahmed, had earlier announced the introduction of the new tax during the public presentation of the 2022 budget in Abuja, on Wednesday, adding that it had been introduced in the Finance Act signed into law by President Muhammadu Buhari on December 31, 2021.
Reacting to this, Director-General, MAN, Segun Ajayi-Kadir, said in a statement that the affected subsector had contributed significantly to the economy and taxes, despite “the debilitating impact of naira devaluation, inadequacy of forex and the COVID-19 pandemic”.
“It would appear that the goose that lays the golden eggs is being led to perdition. The food and beverage subsector contributed the highest (38 per cent) of the total manufacturing sector to the GDP. It comprises 22.5 per cent of manufacturing jobs and generates more than 1.5 million jobs. So, this excise would certainly cast a sunset to this performance,” he said.
According to him, recent studies have shown that introducing excise on non-alcoholic beverages is likely to cause a 0.43 per cent contraction in output and about 40 per cent drop in total industry revenues in the next five years.
Ajayi-Kadir pointed out that a decrease in production levels or ability to purchase raw materials as a result of the introduction of excise tax would result in reduced profits for the supply chain players in the non-alcoholic beverage sector and would have an unpleasant effect on employment, households and consumers.
