Fakoyejo OlalekanThe Manufacturers Association of Nigeria (MAN) has warned that Nigerians will be affected by the proposed 20 per cent Ad-valorem Excise Tax on non-alcoholic beverages.
According to the association, companies will have to downsize their workforce and also pass on the cost of their operation to consumers of their products.
Join our WhatsApp ChannelThe Nigerian government had previously demanded a N10 per litre tax on their operation, as a result, the non-alcoholic producers have been struggling to stay afloat.
It was gathered that the industry recorded a -8 per cent drop in revenue due to the excise tax implementation. With this in mind, MAN said jobs will be lost if the firms have to bear the burden of the 20 per cent Ad-valorem Excise Tax.
The Federal Government is trying to raise revenue by implementing new taxes, but MAN explained that the drinks industry could shut down as a result, making it impossible for FG to obtain the revenue it is seeking from the industry.
“It is projected that the decline will hit 25 per cent by December 2022 if not reviewed. This excludes the cost of write-offs of products produced, excised but not sold.
“This will be catastrophic as thousands of jobs will be affected and the ultimate aim of the government in collecting revenue will be completely defeated.
“Most certainly, the additional 20 per cent will not only kill the sector but result in the loss of revenue by the Federal Government and a consequential phenomenal loss of jobs by various layers of the Nigerian workforce.”
The manufacturers also stated, “The N10 tax is already having devastating effects on the end cost to consumers, considering their poor economic condition; an additional 20 per cent will most certainly kill the sector.”
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