‘It’s against ease of doing business’ — alcohol manufacturers reject excise duty hike

June 6, 2018 8:54 pm

The Distillers and Blenders Association of Nigeria (DIBAN) says it is not in support of the new tax regime announced by the federal government.

Speaking at a press conference on Wednesday, Patrick Anegbe, DIBAN chairman, said the increased excise duty is contradictory to the ease of doing business executive order.

TheCable had earlier reported that the ministry of finance submitted a proposal to President Muhammadu Buhari to increase excise duty on tobacco products and alcoholic beverages effective from June 4.

Kemi Adeosun, minister of finance, had said the decision was reached based on the health implications of the items and their revenue potential.

“We, the Distillers and Blenders Association of Nigeria (DIBAN), under the auspices of the Manufacturers Association of Nigeria (MAN) reject the new astronomical hike in excise duty being selectively imposed on the domestic wines and spirits.

”For the record, the new duty approved for implementation by the honourable minister of finance translates to an increase in duty from the current average of N30 per litre to N150 in the first year and N200 per litre subsequently.

”This translates to an increase from the current average duty of N270 to N1,350 per case (carton) in the first year and N270 to N1,800 per case from the second year.

”This is an increase of over 500% purely on local wines and spirits with the exclusion of all imported wines, spirits and champagne.”

Anegbe said the new excise duty will put 25,000 Nigerians who are direct employees in the sector at risk of losing their jobs and subject employees in industries like packaging industries, bottles, cartons, labels, cork, laminates, glue, ink, printing, laboratory, marketing, consulting, media at risk too.

Commenting on the issue, Segun Ajayi-Kadir, MAN director general, said the new excise duty will encourage smuggling and push consumers in the direction of smuggled drinks, which has implications on their health and government revenue.

Ajayi-Kadir said the association is open to consultations with the government to settle on a favourable position.