New Telegraph

MAN restates challenges over excise duty on beverage

Manufacturers Association of Nigeria MAN

The Manufacturers Association of Nigeria (MAN) has disclosed that alcoholic beverages, spirits and tobacco companies in the country are still grappling with operational challenges from the Federal Government’s approved excise duty rates for alcoholic beverages, spirits and tobacco introduced since 2018. Government introduced the tariff under the approved excise duty rates for alcoholic beverages, which cut across beer and stout, wines and spirits for the three years from 2018 to 2020. A breakdown showed that beer and stout attract N0.30k per centiliter (Cl) in 2018 and N0.35k per Cl each in 2019 and 2020, wines attract N1.25k per Cl in 2018 and N1.50k per Cl each in 2019 and 2020, while N1.50k per Cl was approved for spirits in 2018, N1.75k per Cl in 2019 and N2.00k per Cl in 2020 respectively. The Director-General of MAN, Mr. Segun Ajayi-Kadir, said that the tariff payment to government by the affected manufacturing firms had been a bitter experience in their production, combined with COVID-19.

He said that many firms had been experiencing high cost of production and struggling to remain in business following the devastating effects on their bottom-line in the last three years. According to him, Nigerian manufacturing companies and indeed most investors are going through tremendous stress at the moment following multiple taxes being paid for running businesses in Nigeria. In fact, the MAN DG stated that they were currently grappling with serious macro- economic challenges and structural constraints impacting on capacity utilisation, productivity and competitiveness over the Federa Government’s approved excise duty. To him, this has been affecting sales, turnover, profitability, shareholder value and the sustainability of investments.

Speaking further, the MAN boss said the norm globally at this time was to provide incentives for industries to aid their recovery from the shocks of the introduced tariff, pandemic and escalating costs. Ajayi-Kadir said: “We cannot afford to be doing the exact opposite. Manufacturers across all product segments need a respite, especially in the light of the unprecedented escalation of production and operating costs.” While speaking further on the impacts of the tariff payment involving manufacturing firms, the industrialist quoted that one of MAN’s key sub-sectors, the Distillers and Blender Association of Nigeria (DIBAN), mentioned that the excise duty was the reason for the increase in the prices of assorted wines and champaign’s in the country. He added that the DIBAN members complained that the excise duty selectively imposed on domestic wines and spirits sector had already distorted industry investments and projection targets from 2018 till date. He said that MAN members kicked against the implementation of the excise duty rates in 2018 by complaining that the timing was wrong in all totality. According to him, save for the over 500 per cent increase approved by government, the domestic wine and spirit sector of the economy could have contributed over N120 billion annually in tax to the national treasury since 2018, whereas, the industry does not even generate up to half of that sales.

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