Distillers and Blenders Association of Nigeria (DIBAN) has urged the Federal Government to stop the implementation of the new excise duty on locally produced alcoholic beverages and tobacco, insisting it could affect the companies’ operations and results in massive job losses.
At a press briefing jointly addressed by Chief Patrick Anegbe, Chairman, DIBAN, the group noted that the new tax regime was an attempt by the Minister of Finance, Mrs. Kemi Adeosun to foist an IMF agenda on Nigeria, ThisDay newspaper reports.
He revealed that the new duty approved for implementation by the minister translates to an increase in duty from the current average of ₦30 per litre to ₦150 per litre in the first year and ₦200 per litre subsequently.
He noted that the implementation could hurt the economy and result in high rate of smuggling of foreign wines and spirits into the country.
Furthermore, Anegbe said that this translates to an increase from the current average duty of ₦270 to ₦1,350 per case (carton) in the first year and ₦270 to ₦1,800 per case (carton) from the second year.
Recall that the Federal Government had on March 11th proposed to amend the excise tariff rates for alcoholic and tobacco products in the country which took effect on June 4.
According to the new taxes, a stick of cigarette will attract a ₦1 specific rate per stick (₦20 per pack of 20 sticks) in 2018, a ₦2 specific rate per stick (₦40 per pack of 20 sticks) in 2019 and ₦2.90 specific rate per stick (₦58 per pack of 20 sticks) in 2020.
Also, beer and stout would attract ₦0.30 per centilitre (Cl) in 2018 and ₦0.35 per Cl each in 2019 and 2020. Wines would attract ₦1.25 per Cl in 2018 and ₦1.50 per Cl each in 2019 and 2020, while ₦1.50 per Cl was approved for Spirits in 2018, ₦1.75 per Cl in 2019 and ₦2.00 per Cl in 2020.
To cushion the effect of the new tax law some companies have revealed plans to increase their local content capacity thereby lowering cost of production.
I didn’t know that it’s only binding on locally made products. It’s better if it also covers imports too.