Have Rethink on New Duty on Alcohol, Tobacco, Distillers Tell FG

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Chika Amanze-Nwachuku and Jonathan Eze

The Distillers and Blenders Association of Nigeria (DIBAN) has urged the federal government to halt implementation of the new excise duty on locally produced alcoholic beverages and tobacco, insisting it could affect the companies’ operations and results in massive job losses.

The placard carrying workers of the affected companies, who staged a peaceful protest at the premises of the Manufacturers Association of Nigeria (MAN) in Lagos, wednesday, vowed to resist what they described as ‘astronomical hike in the excise duty’, lamenting that it will endanger over 250, 000 jobs and investment portfolio of over N420 billion.

According to the protesters, while they are not against federal government’s bid to shore up fiscal revenue, the extremely high excise duty, if allowed, could hurt the economy and result in high rate of smuggling of foreign wines and spirits into the country.

At a press briefing jointly addressed by DIBAN and MAN wednesday, the organisations vehemently opposed the new excise duty, describing it as “an attempt by the Minister of Finance, Mrs. Kemi Adeosun to foist an IMF agenda on Nigeria.”

Specifically, Chairman, DIBAN, Chief Patrick Anegbe noted that the development will further compound the hardship of already impoverished Nigerians.

He explained that the new duty approved for implementation by the minister, translates to an increase in duty from current average of N30 per litre to N150 per litre in the first year and N200 per litre subsequently.

Furthermore, he said that this translates to an increase from current average duty of N270 to N1350 per case (carton) in the first year and N270 to N1800 per case (carton) from second year.

He also expressed concern that the new hike in duty will lead to the collapse of the indigenous wines and spirits segment and pave way for the complete takeover of the Nigerian Wines and Spirits market by the imported and smuggled brands.

“We are also disturbed that the new hike will not only affect the Wines and Spirit industry but also other key sectors of the economy and businesses such as Packaging industries, Bottles, Cartons, Labels, Cork, Laminates, glue, Ink, Printing, laboratory, Marketing, Consulting, Media, to mention a few”.

“We are particularly worried that our industry investment of over N420 billion is being threatened by the recent upward review of Excise duties on locally produced Wines and Spirits. We strongly hold the view that if the intention of government is to grow local industries, imposing exorbitant duties on locally manufactured goods is a contradiction of that objective”.

Anegbe countered the position of the minister that the excise duty hike has to do with the health of consumers, saying that the increase will lead to many local manufacturers closing shop, giving room to fake and adulterated products.

Speaking also, the Director-General, MAN, Mr. Segun Ajayi, said that it was a wrong timing on the part of the federal government to increase the consumption tax without making reference to the prevailing economic conditions in the country.

“The rate is astronomical. This means that there will be 545 per cent on a product that is majorly consumed by the people at the low-end of the market. What you have is raising the hands of the foreign brands. We need to be very strategic because it is a trade issue”.
“If you increase the excise duty because you want to guarantee the health safety of the consumers, you might be doing this in the other way round”.

He therefore appealed to FG to rethink the decision, saying that the market place is a competition between foreign and local brands and that the consumers will bear the brunt at the long run.