AFBTE Urges FG to Review Excise Duties on Alcoholic Beverages, Tobacco, Others

*Wants incoming government to prioritise manufacturing sector, enhance FX inflows

Sunday Ehigiator

The Association of Food, Beverage & Tobacco Employers (AFBTE) has asked the federal government to review the new excise duties placed on alcoholic beverages, tobacco and single use plastic products.

The association made the call at its Annual General Meeting (AGM) held in Lagos, yesterday.
It also urged the incoming administration to pay keen attention to fixing the challenge of foreign exchange (FX) scarcity in the country and also prioritise the manufacturing sector.

In his address, AFBTE President, Chinedum Okereke said, “The most topical issue concerning our industry at this time is the hike in excise duties on alcoholic beverages, tobacco and single use plastics which was made public on the last but one, working day in April 2023.
“This was one month to the proposed date of implementation of the new tariffs, on June 1, 2023.

“Hitherto, the existing Fiscal Policy Measures Roadmap was to run from 2022 to 2024. On the basis of this, our member-companies had concluded all that was necessary and had made appropriate provisions with respect to their tax liability to government before the new tariff regime which if not reversed, will further impoverish businesses.

“The development is more disheartening because despite the extant roadmap alluded to above, the government went ahead to revise these taxes upward, not only for the current year, but also for the following year without adequate research on its negative effect, consultation and involvement of stakeholders.
“One does not need rocket science to know that there are far-reaching implications of this choice made by the government.

“Apart from the discouragement it portends for investors, it will definitely impact capacity utilisation negatively and by extension, volume. Some other effects are: increased costs, lower margins, lower income value, reduced purchasing power, increased inflation, expansion of illicit markets where sub-standard and health damaging products are manufactured; increased unemployment arising from reduced absorptive capacity of businesses etc.
“Our association is of the view that this unwholesome decision should be reversed immediately, especially because businesses have been going through tough times for some time now.”

He said it was “therefore, not auspicious to add more to their already suffocating situation. We therefore plead with the government to do a rethink on this matter.”
Speaking further, Okereke said, the incoming government would need to pay greater and immediate attention to the FX scarcity in the country when it assumes office.

“Our sector depends on FX to fund the importation of raw materials, machinery, equipment, spares, and other inputs that are used to manufacture the various products.
“The costs of procurement, which were phenomenally high in the past year and are high at this point in time, require a very urgent solution,” he added.
He said the incoming administration must also prioritise its support for the private sector, “particularly the manufacturing sector whose fortunes have been on a downward trend in recent years.

“It is a common knowledge that manufacturing is a major contributor to job creation, reduction of unemployment and poverty,” he added.
Okereke, however, lamented the regular disruption of businesses by government agencies.
According to him, “This is an issue our member companies face quite frequently and which we have always drawn attention to at previous AGM. However, it has not changed.

“Agencies of government still come around to disrupt businesses by locking gated among the other steps they take. These disruptions have assumed unimaginable dimensions, with a very negative impact on businesses.”

Meanwhile, the AFBTE made a total of N96.56 million income for the year 2022.
 According to the association’s financial statement, this represented a 10.72 per cent increase from a total income of N87.81 million it made in 2021.
A further breakdown of the report revealed that, “Subscription income increased by N3.5 million in 2022, with the admission of two member-companies.
“Investment income also increased from N1.89 million the previous year to N4.32 million in 2022 while other income was boosted by N2.55 million from entrance fees paid by new members and recovery of subscription in arrears.

“In the year under review, the association spent N82.65 million, which represented an increase of 20.98 per cent when compared with our expenditure in 2021which stood at N68.31 million. The increase was occasioned by increases in provision for depreciation and administrative expenses.”