Report has shown that, the beverage and tobacco sectors of the economy have been imposed with additional excise taxes ranging from 20% to 100% on previously approved rates effective from 1 June 2023 making it the highest taxed sector so far.
However, the 2023 Fiscal Policy document signed by the Minister of Finance, Budget and Planning, Zainab Ahmed, wines, beer and stout including other alcoholic beverages and beer not made from malt-whether fermented or not fermented have been taxed N75 per litre and will increase to N100 per litre in 2024.
It adds that wines, taxes on spirits, whisky, brandy, Vodka and Rums will currently be paying a tax of N150 per litre which will increase to N200 per litre in 2024.
It was noted that, the Tax on tobacco per stick is N8.20k as other tobacco products containing tobacco substitutes in any proportion are being taxed N1, 500 per Kg or N3, 500 per litre.
Since the announcement by the finance ministry, the tax increase has elicited several reactions from industry players who have expressed concerns over the devastations it will have on the economy especially as the country continues to grapple with inflation among several economic challenges.
The Manufacturers Association of Nigeria (MAN) in a statement recently stated that the new tax burden will plunge the country into recession with severe impact on the economy.
Hear them, “We are again emphasizing the fact that the proposed increase in the recently released 2023 guidelines i.e., on Beer, Wines and Spirits, Tobacco, has the potential to trigger unprecedented distortions in the affected industries as well as the entire manufacturing sector.
“The policy is capable of producing a negative effect on investments with a huge consequence on job retention in these industries.
“We therefore strongly recommend that the government should maintain the status quo regarding the already government-approved excise duty increases on these items in the 3-year Roadmap as contained in the 2022 FPM.”
During the Pre-AGM media briefing held recently in Lagos, the Managing Director/CEO of the Nigerian Breweries, Hans Essaadi had called for leniency in taxation as its ripple effect on the country will be enormously be damaging to the economy.
He said, “It is our firm belief that as a big corporation, all our beverages will have to pay duties and we respectfully want to pay our duties and taxes in full. Further excise, tax increases including significant ones at this point in time will have a devastating effect on our business.
“We are in dialogue with the government to allow us to pay a fair amount of taxes without overdoing it because excise tax increases significantly mean price increases in the market because it is indirectly a tax to the consumer leading to high consumer prices. Excise tax at this point is wrong” he said
(ME)