NIGERIA – Stakeholders in the alcohol beverage industry declared their opposition to the recent 500% increase in excise duty rates on alcohol by the Federal Government, according to Beverage News.
The stakeholders, which includes the Nigerian Labour Congress (NLC), Manufacturers Association of Nigeria (MAN), Distillers and Blenders Association of Nigeria (DIBAN), and the Association of Food, Beverage and Tobacco Employers of Nigeria (AFBTE) expressed their displeasure over the rate hike to a Senate Committee on Finance at a public hearing on the matter.
The committee organized the public hearing following a resolution by the Senate in May for “The Urgent Need to Review the Excise Tariff Increment in order to Save Local Distillers of Beverages from Looming Extinction”.
Various speakers from the stakeholders said that the proposed alcohol excise duty increase would lead to bankruptcies of the affected industry and render millions without jobs.
Beverage News added that the Chairman, DIBAN, Mr. Patrick Anegbe, warned that the increase, if implemented would render N420bn investment worthless, while 250,000 workers risk losing their jobs.
The representative of the Labour Unions at the hearing, Mr. Mike Olanrewaju, described the proposed 500% excise duty increase as suicidal, stating that it should never be allowed to be implemented.
“One of the strategies expected from any responsible and responsive government in preventing crime and fighting poverty is job creation and not job losses through outrageous and outlandish tariff hikes that will collapse industries, and by extension, render millions of Nigerians jobless,” said Mr. Mike.
“To us in the labour sector, it is capital no to such tariff increase, and if any increase is to be made at all, it should not be above one digit.
The proposed increase is counterproductive and will be resisted by all stakeholders, because after Dunlop, Michelin, etc., we don’t want any industry to collapse or relocate out of the country again,” he said.
The Director-General, MAN, Mr. Segun Kadiri, said that although the Federal Ministry of Finance and the Tariff Technical Committee (TTC) consulted the association on the proposed tariff rate increase, it was not the rate that was agreed upon that was eventually adopted by the Federal Government.
However, the Director of Legal Services, Federal Ministry of Finance, who represented the Finance Minister, Mrs. Kemi Adeosun, argued that the rate hike was agreed upon by all stakeholders before the ministry issued a circular in February.
“Protests and petitions trailing the circular since then from concerned stakeholders are to us, unfortunate,” he said.
At the end of the session, the committee announced it will renegotiate the rate with the executive to ensure a downward review of the proposed excise duty rate.