FG to review excise duty on alcoholic beverages

The Federal Government on Friday said it would review the 500 percent tariff placed on locally produced alcoholic beverages in the country to forestall job losses in the sector.

The Minister of Labour and Employment, Chris Ngige, in a statement signed by the Director of Press in the ministry in Abuja, Samuel Olowokere, made this disclosure when members of the National Union of Food, Beverage and Tobacco Joint Employers and Workers Association visited him in his office on a Save Our Soul (SOS) mission.
The minister said the review would save the sector from imminent collapse and forestall the consequent loss of about two hundred thousand jobs.

“We will certainly not commit to any policy that will make us lose two hundred thousand jobs.
“Because once you add a new cost and pass it on, there will be consumer resistance, resulting in low patronage. Whereas the products coming from overseas that are being smuggled in which are cheap, will take over the market. It is a statement of fact.

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“The President will definitely ask the Minister of Finance and the economic management team to review the tariff. The President does not want to throw many families into anguish,” he said.
Earlier, Mike Olarenwaju, the leader of the delegation and the Acting General Secretary of the Union noted that the tariff increase on their products was counter-productive as the measure was an assured destruction of the sector.
“It will kill investments, it is already creating palpable fear in the operators, jobs losses is looming while imported products will displace local goods for reasons of smuggling and cheapness,” he said.
Olarenwaju, explained they were on SOS to the minister to save the sector from going the way of the textile industry.
In March, while announcing the plan, Minister of Finance, Kemi Adeosun, said the new excise duty 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.
The excise duty, which was at 20 percent for spirits, amounting to N31 per liter, was increased to 500 percent to N150 in the first year and N200 per litre subsequently.
On June 4, the Federal Government through the Ministry of Finance commenced the introduction of the new excise duty on alcoholic beverages and tobacco products, a policy which caused an increase in the prices of the products in the country.
Two days after, the Distillers and Blenders Association of Nigeria (DIBAN) rejected the new excise duty, saying there was no prior consultation whatsoever with the indigenous producers of wines and spirits before adopting the new excise method.

By Oluwasegun Olakoyenikan…

 

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