Nigerian Operators Upset Over the Proposed 20% Tax on Non-alcoholic Beverages by the Federal Government.
An analysis of the effects of the current N10 per litre excise tax between June and August 2022 revealed an eight percent revenue decrease as a direct result of the adoption of the excise tax. Operators said that this would cause the soft drink market, which is already suffering, to collapse when combined with the implementation of the proposed 20% Ad-Valorem tax.
The manufacturing sector makes up 15% of the Nigerian economy’s GDP, compared to the food and beverage sector’s 5% contribution. The federal government currently receives payments of N202 billion in Value Added Tax (VAT) and N207 billion in Company Income Tax (CIT), which represent significant losses if the sector is allowed to fail.
In order to save the industry’s demise, they demanded that the federal government suspend their disastrous excise tax proposal.
Corporate Affairs and Sustainability Director at Nigerian Bottling Company (NBC), Ekuma Eze, backed up this claim by pointing out that businesses in the sector have been experiencing a worrying decline since the implementation of the N10 per litre Excise Tax; the average loss in volume and revenue is -10% between June and September 2022, and it is predicted that the decline will worsen to -25% by December 2022.