AFBTE, NUFBTE call on FG to rescind new excise duty rate increase on alcohol, tobacco set for June

Stakeholders in the food, beverage and tobacco sub-sector have called on the Federal Government to suspend its proposed increase on excise duty rates on alcoholic beverages and tobacco products which is set to go into effect on June 4, 2018.

The group said that it was with deep regret that the government was making plans to raise the excise duty rates at a time industry producers were experiencing declining volumes and contracting margins, noting that the effect of absorbing the cost of the new excise duty regime would be over-whelming on industry players.

They note that the new development would reverse some of the earlier gains made which saw a GDP growth rate of 8.62% in the sub-sector in 2017 over 2016 and representing a growth rate of 2.35%

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

She noted that the new excise duty rates had been spread over a three-year period from 2018 to 2020 in order to moderate the impact on prices of the products. Adeosun said that the new excise duty regimes followed all-inclusive stakeholder engagement by the Tariff Technical Committee of the Federal Ministry of Finance with key industry stakeholders.

However, the Association of Food, Beverage and Tobacco Employers (AFBTE) at its 39th Annual General Meeting held over the weekend called on the Federal Government to provide the real sector with all the necessary support to attain its full capacity and potential in order to make agriculture and manufacturing more competitive.

Speaking at the event, 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% 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 contracted and if the business is not there, the workers also will not be there. This will give room for imported brands to 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) decried the proposed excise duty increase and pledged to go on labour strike when it takes effect. President of the Union, Lateef Oyelekan, who spoke at a meeting by the organized labour recently, said that more than 20,000 workers are presently employed in the sector and may lose their jobs if the new excise duty regime takes effect. He said that the new tariff would impact on the cost of production, thereby increasing the prices consumers would have to pay for tobacco and alcohol beverages.

For his part, the secretary of the association, Adewale Jones, said what government needed to do to reduce the health effects associated with tobacco related diseases and alcohol abuse is advocacy, regulation and control, adding that tariff increases will not stop alcohol abuse by desperate youths, but enlightenment on the ills of excessive alcoholism would.

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