MAN praises suspension of beverages, tobacco excise duty hike

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The Federal Government’s decision to put a stop to the proposed rise in excise duty on alcohol, non-alcoholic beverages, and tobacco has been applauded by the Manufacturers Association of Nigeria.

It also commended the administration for enabling the Federal Government Sectoral Plan for the years 2022–2024 to run its complete course.

This was said in a statement provided to our correspondent on Tuesday and signed by Segun Ajayi-Kadir, the association’s director general.

The Finance Act, which President Muhammadu Buhari signed into law in December 2021 alongside the 2022 Appropriations Bill, included a new policy that included the duty fee.

The new sugar tax, according to Zainab Ahmed, Minister of Finance, Budget, and National Planning, was implemented to increase excise taxes and revenues for essential expenses related to health care and other areas, in keeping with the 2022 budget priorities.

MAN cautioned that a new tax on carbonated beverages and other items would be ineffective, and that the government should find other ways to raise money instead of unintentionally strangling the already-struggling productive sector.

It was mentioned that the implementation of an excise levy of N10 per litre on all non-alcoholic, carbonated, and sweetened beverages in the nation would be a significant setback for the productive sector in 2022.

“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,” Ajayi-Kadir said.

The organisation promised to highlight the Federal Government’s support for the continuation of manufacturing in Nigeria, albeit it regarded the cessation of excise duty as a relief for its members throughout the Federation.

“The Association is gladdened by the assurances of the Honourable Minister, Hajiya 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 Beverages 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.

“This comes as a huge relief to our members across the Federation and will signpost the administration’s support for the sustenance of manufacturing in Nigeria on this score.

“Furthermore, MAN received the understanding of Government on the introduction of 0.5% Import surcharge, which is meant to fulfil 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 logjams in the interpretation of the Tin Plate, HS Code 7210. 12.00.00 with the Nigeria Customs Service.

“From the foregoing, the Association views the Federal Government’s move as one that will encourage our 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.

“This move will reassure members of the administration’s respect for stakeholder’s engagement and the usefulness of public-private sector dialogue,” the statement read.