The Nigeria Labour Congress has rejected the excise duties (indirect tax) on locally produced carbonated drinks, warning that the move could precipitate an industrial crisis in the sector.
The Federal Government on Wednesday announced N10 per litre tax on all non-alcoholic, carbonated and sweetened beverages, as contained in the 2021 Finance Act.
But the NLC in a statement on Friday by its President, Ayuba Wabba, condemned the tax policy and also advised the government to seek a win-win solution by engaging stakeholders in the affected sector.
Wabba, in the statement titled, ‘Nigerian workers reject imposition of excise duties on locally produced carbonated drinks’, said the NLC had in a letter dated November 27, 2021 appealed to the President, Major General Muhammadu Buhari (retd.), not to approve the tax.
He said, “Our concern is the mass hunger that would result from the slightest increase in the retail price of soft drinks owing to imposition of excise duties as the product would be priced beyond the reach of millions of ordinary and poor Nigerians.
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“Congress was also alerted by the complaint of manufacturers of soft drinks in Nigeria that the re-introduction of excise duties on their products would lead to very sharp decline in sales, forced reduction in production, and a sure rollback in investments with the certainty of job losses and possibly shutdown of their manufacturing plants.’’
The union recalled that two tyre manufacturing firms, Dunlop and Michelin, relocated their plants to Ghana following a similar complaint of harsh policy.
With 38 per cent of the entire manufacturing output in Nigeria and 22.5 per cent share, the congress explained that food and beverage sub-sector had generated N202bn Value Added Tax to the coffers of the government in the past five years, N7.3bn in Corporate Social Responsibility and created 1.5 million jobs.
The NLC said, “In light of the foregoing, we ask the National Assembly to quickly amend the sections of the Finance Act 2022 that re-introduced excise duties on non-alcoholic and carbonated drinks. We hope that the current situation will not be allowed to degenerate into a breakdown in industrial relations in the sector and generally in the country.”
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