The Manufacturers Association of Nigeria (MAN) has urged the federal government to reverse the recently increased excise duty for alcoholic beverages and tobacco or witness the shut down of businesses in the industry.

MAN President, Francis Meshioye disclosed this during a press conference held in Lagos that the increase will force businesses to scale down operations, which will  result in factory closures, job losses, a decline in exports among others.

Meshioye pointed that the increase came at a time when the manufacturing sector was immersed in unprecedented crisis and an acute recession, due to extraordinary challenges, namely sustained scarcity of naira, limited access to foreign exchange, high inflation and a struggling economy.

He explained that the exponential increase in excise duty in the 2023 Fiscal Policy Measures came as a shock to the industry and was in contrary to the promise made to the association by the Federal Government, through the Ministry of Finance, Budget and National Planning on March 23, 2023.

“The government initiated a 3-year excise roadmap in 2018, after extensive
consultation with the industry, and the roadmap ran successfully until its
conclusion in 2021, without any change or issues. This enabled the industry to
successfully plan its operations, given the certainty in excise. In 2021, the
government retained the excise rates for 2020/21 up until May 2022, while it
utilized the 1-year period to engage extensively with industry to decide on a
revised roadmap. Following this engagement, the government released the 2022 FPM with a revised 3-year excise roadmap which, though providing for higher excise rates, still took into consideration the potential impact on the industry.”

The association therefore requested that the federal government suspend the 2023 FPM on excise duty and retain the 2022 -2024 excise duty roadmap as approved in the 2022 FPM, to foster stability in the affected sectors
and their value chain, in the interest of the national economy.

MAN also requested that the government, “Reverse the tax on Single Use Plastics and engage with relevant stakeholders to facilitate ongoing initiatives, which have a better prospect of achieving the desired environmental objectives. A good example of this is the Food & Beverage Recycling Alliance, approved by the federal government.”

In addition, “Consider, with input from the sector and other critical stakeholders, alternative measures to achieve revenue and other objectives of the government in a sustainable manner.