Stakeholders want FG to grant tax holiday in beverage sector

Stakeholders in Nigeria’s beverage industry have asked the Federal Government to grant tax holidays in the sector to drive stability, while also lauding the move to suspend the proposed increase in excise duty of N10 per litre for alcohol, non-alcoholic beverages and tobacco.

In a chat with Daily Times, the National President of the Food, Beverage and Tobacco Senior Staff Association (FOBTOB), Jimoh Oyibo, explained that most manufacturing firms, pay through their nose. “We pay so many taxes. Recently they increased tax, suddenly they said they have reduced it.

“They increased taxes on alcoholic and non-alcoholic last year. It is all politics, it has not served any purpose, and the status quo remains.”

He further emphasized that if the economy is good, industries, particularly food, should be given a tax holiday, because what companies pay as tax is more than enough to turn the fortunes of those companies.

“If businesses are to thrive, the government should see the reasons why tax holidays should be given, probably for a period for the industry to stabilize.

“We are not saying we should be exempted from tax, but tax holidays should be given for some time so that some of those losses they have incurred should be recouped. But the government is only interested in bleeding us to death.

Also speaking, the Director General Manufacturers Association of Nigeria (MAN) Segun Ajayi-Kadir, disclosed that the association views the Federal Government’s move as one that will encourage members who are currently struggling with unprecedented low sales, forex squeeze, inadequate electricity supply and multiple taxes and levies from the three tiers of government.

“This move will reassure members of the administration’s respect for stakeholder’s engagement and the usefulness of public-private sector dialogue.

“This comes as a huge relief to our members across the Federation and will signpost the administration’s support for the sustenance of manufacturing in Nigeria on this score.

He explained that MAN received the understanding of Government on the introduction of 0.5% Import surcharge, which is meant to fulfill Nigeria’s obligations to the continental agreement in the implementation of Africa Continental Free Trade Area (AfCFTA) agreement, as well as the promised intervention on resolving the logjams in the interpretation of the Tin Plate, HS Code 7210. 12.00.00 with the Nigeria Customs Service.

The Daily Times recall that the charge was part of a new policy introduced in the Finance Act, which was signed into law by President Muhammadu Buhari on December 31, 2021, alongside the 2022 Appropriation Bill.

According to the Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, the new sugar tax was introduced to raise excise duties and revenues for health-related and other critical expenditures in line with the 2022 budget priorities.

Although the projected revenue was projected at N81bn from 2021-2025, the potential loss to government in other forms of taxes and revenue cut leaves much to be desired.