FG Suspends Proposed Increase in Taxes on Soft Drinks, Beverages, Alcohol, Manufacturers Happy Over Decision
- The Nigerian government has suspended taxes on soft drinks, alcohol, and beverages
- The Manufacturers Association Nigeria (MAN) hailed the decision by the federal government
- The Federal government intended to increase the tax on carbonated drinks in the 2022-2024 Finance Act
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The Manufacturers Association of Nigeria has applauded the Federal Government’s decision to suspend the proposed increase in excise duty on alcohol, non-alcoholic beverages, and tobacco.
The body further praised the Nigerian government for letting the 2022-2024 Federal Government Sectoral Roadmap run its full circle.
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FG included the increase in Finance Act
A statement signed by MAN’s Director-General, Segun Ajayi-Kadir, disclosed this.
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The proposed tax increase was part of a new policy introduced in the Finance Act, signed into law by President Muhammadu Buhari in December 2021, alongside the 2022 Appropriation Bill.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed that the tax raised excise duties and revenues for health-related and other critical expenditures in line with the 2022 budget preferences.
Punch reports that the body cautioned that a new tax introduced on soft drinks and others would be counter-productive and that the government should find other ways of generating revenues rather than stunting the growth of the already-struggling private sector.
MAN noted that a significant setback hit the productive sector due to the N10 per litre sugar tax on all non-alcoholic drinks in the country.
Analysts have said the suspension will impact the prices of the affected products across the country.
MAN said:
“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.”
Sugar tax, inflation force soft drink manufacturers to raise prices
Legit.ng reported that three months after implementing the federal government’s N10 per litre excise duty on all non-alcoholic, carbonated, and sweetened beverages, soft drink manufacturers had devised coping mechanisms, including an increase in prices.
According to reports, despite initial opposition against the policy in the 2021 Finance Act, the concerned manufacturers have placed the additional cost on consumers by increasing the prices of their products and have begun remittances to the federal government.
The sugar tax affects soft drink makers, including Nigerian Bottling Company, Nigerian Breweries, and Rite Foods.
Source: Legit.ng
