Industrialists fear new tax on non-alcoholic drinks will lead to unemployment

Some industrialists have faulted President Muhammadu Buhari regime’s imposition of N10 per litre excise duty on non-alcoholic beverages production.

Finance minister Zainab Ahmed announced Wednesday at the public presentation and breakdown of the 2022 budget in Abuja, that the new policy was aimed at discouraging excess sugar consumption and tackling diabetes.

In an interview on Thursday, in Lagos, the director-general, Lagos Chamber of Commerce and Industry (LCCI), Chinyere Almona, said that her immediate concerns were the likely increase in prices, which would lead to a decrease in demand and consequently loss of jobs.

She explained that the prohibition on imported drinks should be better enforced to protect domestic production from unfair competition in the face of the high cost of production in Nigeria.

According to her, the realised revenue from these levies could be channelled to improving the country’s grossly inadequate health infrastructure.

She recommended that “the allocation of N876 billion to the health sector in the 2022 federal budget should be reviewed to about a trillion Naira and invested into the sector in the next 10 years.

“Beyond the levying of taxes on carbonated drinks to force a reduction in consumption, public health agencies should regulate the production of sugary drinks to reduce their negative effect on human health,’’ she added.

In his submission, Muda Yusuf, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, also implored the government to put the move on hold, as the timing of the policy was not auspicious enough.

“This move is ill-timed and inappropriate given the prevailing harsh economic and business conditions and a negation of the economic recovery and job creation aspirations of the Federal Government.

“This is detrimental to the job creation and poverty reduction commitment of President Muhammadu Buhari,’’ he said. 

Mr Yusuf noted that excessive taxation could become unbearable for the private sector and hinder the job creation and poverty alleviation promised by President Muhammadu Buhari.

“Some of the taxes and levies that are already being paid include Corporate Income Tax of 30 per cent, Education Levy of two per cent and Value Added Tax (VAT) of 7.5 per cent.

He emphasised that upcoming businesses in the beverages sector will be hit by the proposal, adding that millions of micro-enterprises in the soft drinks’ distribution chain will be adversely impacted by the imposition of the excise tax.


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