Hike in excise duty threatens N420bn investment

June 6th, 2018

From Cyriacus Nnaji, Lagos

Distillers and Blenders Association of Nigeria (DIBAN), a sectorial group of the Manufacturers Association of Nigeria has stated that the intended hike in Excise Duty on alcoholic beverages by Federal Government will sink an estimated N420 billion investment in the sector.

Chief Executive Officer (CEO), Intercontinental Distillers Limited, Chief Engineer Patrick Anegbe who doubles as the Chairman of DIBAN stated this at a joint press briefing by DIBAN and MAN at MAN House in Ikeja, Lagos on Wednesday.

He said the briefing was to address issues arising from the recent amendment cum increase in the excise duties on tobacco and alcoholic beverages by the federal government which has generated a lot of diverse issues and interests in the industry and beyond.

DIBAN, he said, reject the astronomical hike in Excise Duties being selectively imposed on domestic wines and spirits on one of the oldest and thriving indigenous industry in Nigeria.

“For the records, the new duty being approved for implementation by the Minister of Finance, translates to an increase in duty from the current average of N30 per litre to N150 per litre in the first year and N200 subsequently; this translates to average duty of N270 to N1350 increase per case (carton) in the first year and N270 to N1800 per case from the second year. This is an increase of over 500% purely on local wines, spirits and champagnes,” Anegbe said

He called the increase an International Monetary Fund (IMF) agenda, “We reject in totality the highly punitive and selective astronomical hike in duty, a purely IMF agenda being camouflaged as a health concern. We are sad to note that this is an attempt by the minister to foist an IMF sponsored agenda on Nigeria which will further compound the hardship of already impoverished Nigerians.

“We are particularly worried that the job of over 25,000 Nigerians plus over 250,000 connected SMEs staff are being threatened by this hike. If the implementation of the new duty hike is allowed to proceed, we are worried about obvious job losses that will result from low demand of our products. We are concerned that the new hike in duty will lead to the collapse of the indigenous wines and spirits segments and pave way for the complete takeover of the Nigerian wines and spirits market by imported and smuggled brands.”

DIBAN and MAN said they were disturbed that the new hike will not only affect the wines and spirits industry, but other key sectors of the economy and businesses such as packaging industries, bottles, cartons, labels, cork, laminates, glue, ink, printing, laboratory, marketing, consulting, media, among others.

He said the massive staff layoffs, which is sure to affect the staff in the sector will take its toll on revenue generated by the government on PAYE taxes estimated at N60 billion. DIBAN and MAN therefore called on the Federal Government to immediately halt the implementation of the hike in Excise Duty on all Alcoholic Beverages.

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