Segun Ajayi-Kadir, Director General, MAN

The Manufacturers Association of Nigeria (MAN) has applauded the federal government’s decision to halt the proposed increase in excise duty on the alcoholic, non-alcoholic beverages, and tobacco to allow the 2022-2024 federal government sectoral roadmap to run its full course. 

The association disclosed this in a statement signed by its Director General, Segun Ajayi-Kadir.

“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 engagement and the usefulness of public-private sector dialogue.

“As MAN continues to engage with government meaningfully on matters bordering on the nation’s economic prosperity, we look forward to improved performance of the manufacturing sector and the economy.” the association said.

MAN said that a major setback that plagued the productive sector in 2022 was the introduction of an excise duty of N10 per litre on all non-alcoholic, carbonated, and sweetened beverages in the country.

The duty charge was part of a new policy introduced in the Finance Act, which was signed into law by the President, Major General Muhammadu Buhari (retd.), in December 2021, alongside the 2022 Appropriation Bill.

According to the Minister of Finance, Budget and National Planning, Zainab Ahmed, the new sugar tax was introduced to raise excise duties and revenues for health-related and other critical expenditures in line with the 2022 budget priorities.

Although the projected revenue was projected at N81bn from 2021-2025, the potential loss to the government in other forms of taxes and revenue cuts leaves much to be desired.

However, MAN through series of advocacy channels warned that a new tax imposed on carbonated drinks and others would be counter-productive and that government should devise other means of generating revenue rather than inadvertently stifling the productive sector which is already struggling.

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.