The Manufacturers Association of Nigeria (MAN) stated that the proposal to re-introduce excise duty collection on non-alcoholic drinks will see producers of the items lose up to N1.9 trillion in revenue.
This was disclosed by Mr Fred Chiazor, Chairman, Fruit Juice Producers branch of MAN, at the MMS Business discourse in Lagos, on Tuesday, themed: ‘X-raying the Proposed Excise Duty Regime for Carbonated Beverages in a Recovering Economy.’
He added that the loss in revenue would happen between 2022 and 2025.
What they are saying
He stated that the amount indicated a 39.5% loss due to imposition of the new taxes with concomitant impact on jobs and supply chain businesses and called for a suspension of the fiscal policy, citing that the proposed excise duty collection would shrink the sector’s contribution to the GDP which currently represented 35% of manufacturing.
“Government can lose up to N197 billion in Value Added Tax (VAT), EIT fund and Collective Investment Trust (CIT) revenues occasioned by the drop in industry performance,” he said.
“The current tough economic situation in the nation should see the government introduce fiscal palliatives and tax rebates instead of introducing excise duty collections,” he added.
Meanwhile, the Comptroller-General of the Nigeria Customs Service (NCS), Col. Hameed Ali (Rtd), said that the introduction would trigger a significant revenue rise from excise duty.
“This was due to the wide production and consumption of the carbonated non-alcoholic drinks locally,” Ali said, citing that bringing the carbonated non-alcoholic and alcoholic drinks under excise control would cushion the effects of the overdependence on oil/import duty revenue occasioned by the global economic response to COVID-19.
“Away from the revenue view, the health and environment hazards presented by the production and consumption of carbonated drinks will be ameliorated, bringing them under regulation and control.
“Excise traders under the new regime are likely to think of exportation to enjoy the duty-free delivery incentives from the federal government, thereby attracting more forex to the economy.
The Comptroller-General also stated that given the lessons learnt from the impact of COVID-19 and its effects, many nations of the world have re-strategised their economies in a more diversified way to achieve a robust, stable and prosperous economy with a long-term benefit.