New Excise: Manufacturers to Lose N1.9 Trillion as FG Proposes re-introduction

Between 2022 and 2025, the proposed re-introduction of excise duty on non-alcoholic would amount to 1.9 trillion losses in revenue and sales.

New Excise: Manufacturers to Lose N1.9 Trillion as FG Proposes re-introduction

The Manufacturers Association of Nigeria (MAN) disclosed this yesterday at MMS Business Discourse with the theme: “X-raying the Proposed Excise Duty Regime for Carbonated Beverages in a Recovering Economy.”

The Chairman of Fruit Juice Producers branch of MAN, Mr. Fred Chiazor, said that the losses indicate a 39.5 per cent loss due to imposition of the new taxes with concomitant impact on jobs and supply chain businesses.

The group called for a suspension of the fiscal policy, even as it noted that the proposed excise duty collection would shrink the sector’s contribution to the GDP, which currently stands at 35 per cent.

“Government could 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,” the MAN representative said.

He argued that the tough economic situation in the nation should see the government introduce fiscal palliatives and tax rebate, instead of introducing excise duty collection.

Earlier, the Comptroller-General of Nigeria Customs Service (NCS), Col. Hammed Ali (Rtd), stated that with the wide production and consumption of carbonated non-alcoholic drinks locally, there is a strong indication that it will trigger a significant revenue rise from excise duty when brought under excise control.

Ali, who was represented by the Controller, Lagos Industrial Command, Comptroller, Monica Shaahu, presented a paper entitled, “Merits and Demerits of Excise Duty in a COVID-19 Recovering Economy.”

Comptroller Shaahu noted 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 global econonic 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 attaracting more forex to the economy.

“Given the lesson learnt from the impact of COVID-19 and its effects; many nations of the world have re-strategised their economical system in a more diversified way to achieve a robust, stable and prosperous economy with a long term benefit.