By Eberechi Obinagwam,
Nigeria Labour Congress, has demanded for a quick amendment of the sections of the Fiance Act 2022 that re-introduced excise duties on non-alcoholic and carbonated drinks by the National Assembly.
The demand was made after the president signed into law the fiance Act 2022 which included the imposition of excise duties on locally produced non-carbonated, and sugary drinks on the 31st of December, 2021.
According to the president, his decision was to discourage the consumption of sugar by Nigerians as government claims that soft drinks have contributed to upsurge of cases of obesity and diabetes in Nigeria.
But, labour had earlier reiterated in an appeal to the president, and the leadership of the two chambers of the National Assembly pleading that government should suspend the re-introduction in a letter dated 27th November, 2021 with cogent reasons that it’s re-introduction will impose immense hardship on ordinary Nigerians who easily keep hunger at bay with a bottle of soft drink and maybe a loaf of bread.
Saying that their concern is the mass hunger that would result from the slightest increase in the retail price of soft drinks owing to imposition of excise duties as the product would be priced beyond the reach of millions of ordinary and poor Nigerians.
In a statement by labour President, Commrade Ayuba Wabba, he disclosed that congress was also alerted by the complaint of manufacturers of soft drinks in Nigeria that the re-introduction of excise duties on their
products would lead to very sharp decline in sales, forced reduction in production, and a sure roll back in investments with the certainty of job losses and possibly shut down of their manufacturing plants.
”Nigerians would recall that this was also the complaint of tyre manufacturing companies such as Dunlop and Michelin which was
overlooked by government until the two companies relocated to neighbouring Ghana.
A similar situation is playing out with the soft
drinks manufacturing sub-sector. Government should pay attention. With 38% of the entire manufacturing output in Nigeria and 22.5%
share representation of the entire manufacturing sector in Nigeria, the food and beverage industry is the largest industrial sub sector in our country.
The food and beverage sub-sector has generated to the coffers of government N202 billion as VAT in the past five years, N7.3
billion as Corporate Social Responsibility and has created 1.5 million decent jobs both directly and indirectly. There is thus no gainsaying the fact that the industry is a golden goose that must be kept alive.
The health reason proffered by government as reason for the re-introduction of the excise duties seems altruistic. Yet, we are amiss
why the government did not place the excise duties on sugar itself as a commodity rather than on carbonated drinks. The truth of the
matter is that additional increase in the retail price of carbonated drinks would put more Nigerians at risk of serious health challenges
as many people would resort to consuming sub-standard and unhygienic drinks as substitutes for carbonated drinks,”
He said that the appeal to rescind the re-introduction of excise duties on non-
alcoholic drinks becomes even more compelling when the projected immediate revenue expected from the policy is weighed against the potential long-term loss to both manufacturers and government.
That the beverage sub-sector will lose 40% of its current sales revenue. This according to him translates to a loss of N1.9 trillion. While the government will only make a total projected receipts of N81 billion from the proposed re-introduction of the excise duties.
He said government also stands to lose
N197 billion in VAT, Company Income Tax and Tertiary Education Tax as a consequence of expected downturn in overall industry
performance should the excise duties be effected as being planned.
The union aside demanding for an amendment of the excise duties, has also asked government to extends COVID-19 palliatives and support incentives
to the Food and Beverages industry to cushion the shock and haemorrhage that the industry is trying to recover from.
“Finally, we demand that Government should engage Employers in the sub-sector and Organized Labour in sincere discussions on other options that can deliver a mutually satisfying win-win solution on this issue, ” he said.
