NIGERIA – The Food, Beverage and Tobacco Senior Staff Association (FOBTOB) has asked the Federal Government to re-evaluate the advice to increase tariff on alcohol and tobacco to protect job losses.
Speaking to the media, the General Secretary of FOBTOB, Mr. Iji Solomon made the call to the government.
Finance Minister, Mrs. Kemi Adeosun had recently recommended tariff increase on alcohol and tobacco because of their health implications and as a means of raising revenue for the government.
According to Solomon, the recommendation to raise tariff on the products could affect union manufacturers leading to lay-offs.
“There is no doubt that the minister proposed the increase based on ECOWAS Common External Tariff, but it should not be at the detriment of local manufacturers or the economy,” he said.
The General Secretary said the price disparity for each of the products by the minister was not understandable but that any increase would impact on the workforce.
He said the “Ad Valorem” tariff (Value Added Tax) was normal tariff on products in the industry but it could increase the unit tax of tobacco.
Solomon noted that about 2,000 workers have lost their jobs in the affected industries over the last two years due to closure of companies and economic indices.
He said the only tobacco company in Nigeria needed incentives while distilleries should be encouraged to employ more workers rather than making them redundant.
“Many distilleries closed business because they can no longer access foreign raw materials for production. Only a few are working and any increase will lead to redundancy.
“Since the distiller companies use local materials, increase in tariff can lead to their collapse. Secondly, with an increased tariff, the distillers will be unable to compete with imported ones,” he said.
He urged the Federal Government to seek the advice of industry stakeholders such as Food, Beverage and Tobacco Employees and Manufacturers Association of Nigeria (MAN) on the issue.
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