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Excise duty: Customs to rake in N127bn from carbonated drinks

  • 12.78bn bottles consumed annually –Report

 

Nigeria Customs Service (NCS) is to realise a minimum of N127billion excise duty from the 12.78 billion bottles of carbonated drinks and sweetened beverages consumed in the country this year.

The revenue follows the Federal Government’s approval of a new excise duty of N10 per bottle as revenue to be collected by NCS.

Findings by New Telegraph from Statistica revealed that in 2020 the country sold N3.83trillion ($6.834billion) of carbonated drinks in an average consumption pattern in Nigerian markets.

Further findings revealed that over 35million bottle benchmark  of CocaCola, Fanta, Sprite, Pepsi, Seven Up, Mirinda and La Casera, Big Cola among other soft drinks are consumed daily in the  country.

 

In the breakdown of 2022 budget, the Minister of Finance, Budget and National Planning, Zainab Ahmed, explained that the N10 charge on carbonated drinks was a new policy introduced in the Finance Act signed into law by President Muhammadu Buhari on December 31, 2021, alongside the 2022 Appropriation Bill.

 

The minister added that the new excise duty was introduced to raise revenue for health-related and other critical expenditures in line with the 2022 budget priorities, saying that it was aimed at discouraging excessive consumption of sugar in beverages, which contributed to diabetes, obesity and other diseases.

 

In 2021, NCS said that the introduction of excise duty nationwide would enable manufacturers to think of export of their products and enjoy the duty free delivery incentives from the Federal Government. It added that this would enable it to reduce over dependence on oil and import duty payment.

 

Also, Nigerian Shippers’ Council (NSC) explained that bringing the carbonated non-alcoholic and alcoholic drinks under excise control would cushion the effects of the dwindling oil and import duty revenue occasioned by global economic response to effects of Covid-19.

 

However, the Manufacturers Association of Nigeria (MAN) argued that the chemicals used by producers as well as the sachets were imported and subjected to import duty payments, adding that excise duty collection would be an additional burden on producers.

 

The association noted that the proposed re-introduction of excise duty collection on non-alcoholic drinks would see producers of the items lose N1.9 trillion in revenue sales between 2022 and 2025.

 

The association’s Chairman, Fruit Juice Producers branch, Mr. Fred Chiazor, explained that the excise duty collection would be an additional burden on producers and would force them to shut down or compromise on their standards.

 

Chiazor, who disclosed this at MMS forum with the theme: ‘X-raying the Proposed Excise Duty Regime for Carbonated Beverages in a Recovering Economy,’ noted that the amount indicated a 39.5 per cent loss would be due to imposition of the new taxes with concomitant impact on jobs and supply chain businesses

 

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