Stakeholders seek suspension of new excise duty on tobacco, alcoholic drinks

Union raises alarm over job losses 

Stakeholders in the manufacturing sector have called on the Federal Government to reverse the proposed upward review of the excise duty rates on alcoholic beverages and tobacco from June 4, 2018.They submitted that it was with deep regret that this is happening at a time manufacturers in the industry are with declining volumes and contracting margins, noting that the impact of absorbing the cost of the revised duty would be over-whelming on current players in the industry.

They opined that the development would reverse some of the outperforming GDP growth recorded by the food, beverage and tobacco sub-sector in 2017 when it recorded an improvement of 8.62 per cent over 2016, representing a growth of 2.35 per cent.

The Minister of Finance, Kemi Adeosun, had in March announced that the new excise duty rates was meant to achieve a dual benefit of raising the government’s fiscal revenues and reducing the health hazards associated with tobacco related diseases and alcohol abuse.

According to the minister, the new excise duty rates were spread over a three-year period from 2018 to 2020 in order to moderate the impact on prices of the products.She however, said the new excise duty regimes followed all-inclusive stakeholder engagements by the Tariff Technical Committee of the Federal Ministry of Finance with key industry stakeholders.

But the Association of Food, Beverage and Tobacco Employers (AFBTE) at its 39th yearly general meeting over the weekend urged the Federal Government to provide the real sector with all the necessary support required to attain its full capacity and potential in order to make agriculture and manufacturing more competitive.

President of AFBTE, Patrick Anegbe who stated that government’s policy on ease of doing business is yet to be at its best, urged that the policy should be reduced to a tolerable level so that the industry can survive, retain jobs as well as investors in the country. 

Anegbe who is also the managing Director of Intercontinental Distillers Limited said: “Alcohol beverages of over 500 per cent increase on tax. If the federal government is sincere on ease of doing business, I don’t think one should think of something like that. What they are trying to do is to make things difficult for people in this industry, at the end of the day, the industry will find it difficult to make profits and their business will be either shutdown or contrasted and if the business is not there, the workers also will not be there. This will give room for imported brands to be come into the country. While the importers of those brands are keeping their people in employment, they will make Nigeria a market place for them but ours will remain in the labour market.”

Also, the National Union of Food Beverage and Tobacco Employees (NUFBTE) condemned and vowed to down tools over the planned increase.President of the union, Lateef Oyelekan, who spoke at a meeting by the organised labour recently, said that more than 20,000 workers are presently employed in the alcoholic and tobacco sector and may lose their jobs if the amendment takes effect.He said the new tariff would impact on the cost of production, thereby creating an increase on the part of consumers who would have to pay more for cigarettes, alcoholic beverages and others.

As part of efforts of government in reducing the health hazards associated with tobacco related diseases and alcohol abuse, the secretary of the association, Adewale Jones, said what government needed to do is advocacy, regulation and control.According to Jones, the increased tariff will not stop alcohol abuse by desperate youths, but enlightenment on the ills of excessive alcoholism would.