MAN Commends FG’s Decision to Halt Proposed Increase in Excise Duty

Gilbert Ekugbe

The Manufacturers Association of Nigeria (MAN) yesterday lauded the federal government’s decision to halt the proposed increase in excise duty on alcohol, non-alcoholic beverages and tobacco.

In a statement signed and issued by the Director General, MAN, Segun Ajayi-Kadir, the directive came as a huge relief to its members across the federation and would signpost the administration’s support for the sustenance of manufacturing in Nigeria.

According to him, the association viewed the federal government’s move as one that would encourage its 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, maintaining that the move would reassure members of the administration’s respect for stakeholders’ engagement and the usefulness of public private sector dialogue.

According to him, 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. Maintaining that the charge was part of a new policy introduced in the Finance Act, which was signed into law by President Muhammadu Buhart on December 31, 2021, alongside the 2022 Appropriation Bill, the Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, had stated that 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 N81 billion from 2021 to 2025 while the potential loss to government in other forms of taxes and revenue cut leaves much to be desired,” he added.

MAN warned that a new tax imposed on carbonated drinks and others would be counter-productive, advising the federal government to devise other means of generating revenue rather than inadvertently stifling the productive sectors 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,” he stressed.

The Director General added that the palpable apprehension in the concerned sector necessitated another courtesy visit and presentation to the Minister of Finance, Budget and National Planning by a delegation of MAN led its president, Francis Meshtoye and the outcomes allayed the fears.

He said the minister had reassured the delegation of government’s commitment to the wellbeing of the manufacturing sector and the concerned sector.

“The association is gladdened by the assurances of the Minister,  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,” he averred.

“Furthermore, MAN received the understanding of government on the introduction of 0.5 per cent 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 loggams In the imterpretation of the Tin Plate, HS Code 7210 120000 with the Nigeria Customs Service,” he added.