Additional 20% excise tax will collapse soft drinks sector — MAN

By Adenike Agunsoye

Operators in the carbonated soft drinks sub-sector of the Manufacturers Association of Nigeria (MAN) have countered the Federal Government’s proposed 20 per cent ad-valorem excise tax on non-alcoholic beverages which includes the widely consumed carbonated drink.

The Carbonated soft drink sub sector group disclosed this in a meeting on Thursday, November 17, 2022, in Lagos that such a move would spell doom for the sector as the effect of the prevailing N10 per litre tax regime was already disabling the industry with its biting effects on businesses.

The group recorded that an industry study on the impact of the prevailing N10 per litre excise tax effect between June and August 2022 showed a 8 per cent revenue decline as a direct result of excise tax implementation. It is projected that the decline will hit –25 per cent by December 2022 if not reviewed.

In a statement, MAN said the study excluded the cost of write-offs of products manufactured, which were excised but not sold.

The Soft Drinks Manufacturers Sub-sector of MAN, which accounts for 33 per cent of the entire manufacturing sector concluded that with the proposed 20 per cent ad-valorem tax introduction, the collapse of the soft drink market was imminent.

MAN agreed that it would be catastrophic as thousands of jobs could be affected and the ultimate aim of the government in collecting revenue completely defeated.

“Most certainly, the additional 20 per cent will not only kill the sector but result in the loss of revenue by the Federal Government, and a consequential phenomenal loss of jobs by various layers of the Nigerian workforce.”