The Manufacturers Association of Nigeria (MAN) has expressed its displeasure with the federal government’s plan to impose a N10 per liter excise duty on all non-alcoholic, carbonated, and sweetened beverages.
The group which described the move as rather unfortunate said the long-term effect of the policy might not achieve the expected aim.
Segun Ajayi-Kadir, the Director-General of MAN, stated that the new tax system may result in job losses and increased costs of goods, which will be counterproductive, adding that the public may not be able to afford the new pricing.
The Federal Government has explained why it imposed a N10/liter excise duty on all non-alcoholic, carbonated, and sweetened beverages.
Speaking during the public presentation of the 2022 budget on Wednesday in Abuja, Minister of Finance, Budget and National Planning, Zainab Ahmed, said the decision was in the interest of Nigerians.
The minister said the excise duty on soft drinks would discourage excessive consumption of sugary beverages which contributes to diabetes, obesity among others.
Ahmed added that the new tax would help raise revenues for the health sector and other critical expenditures.
The minister disclosed that the new policy introduced is in the 2021 Finance Act signed into law by President Muhammadu Buhari on December 31, 2021.
She said, “There’s now an excise duty of N10 per liter imposed on all non-alcoholic and sweetened beverages. And this is to discourage excessive consumption of sugar in beverages which contributes to a number of health conditions including diabetes and obesity. But it is also used to raise excise duties and revenues for health-related and other critical expenditures. This is in line also with the 2022 budget priorities.”
The Manufacturers Association of Nigeria (MAN) has warned that the government may not have carefully considered the entire process and its consequences.
Between 2022 and 2025, the government is expected to earn N81 billion in excise duty on carbonated drinks, but lose N197 billion in other taxes, including Value Added Tax and Company Income Tax, from soft drink manufacturers, according to the association.
This is in addition to any job losses, salary reductions, or repercussions on supply chain firms that may occur.
Ada Peter
