The Center for the Promotion of Private Enterprise (CPPE) has called for a halt to the planned imposition of excise duties on manufacturers. This was revealed by Dr. Muda Yusuf, CEO of CPPE in a document titled, “The CPPE calls for the suspension of the planned imposition of excise duties on manufacturers”

Yusuf said Finance Minister Ms. Zainab Ahmed warned earlier this year that excise duties would soon be levied on a variety of goods manufactured in the country.

He, however, argued that manufacturers are already facing extremely difficult times due to rising energy costs, increased operational expenses, steep currency depreciation, illiquid foreign exchange market, galloping inflation and various structural impediments.

What the CPPE says

He said the manufacturing sector which faces many bottlenecks should be supported rather than distorted by more taxes.

  • They also experience significant spikes in the cost of raw materials, the cost of funds, high import duties, prohibitive transportation costs and high logistics costs. Much of these costs cannot be passed on to consumers due to low purchasing power and high consumer resistance. Given the strategic importance of manufacturing to the Nigerian economy, what the sector needs right now is more stimulus, not more taxes.

He also has commented on energy crises facing the manufacturing sector in Nigeria.

  • The cost of diesel has increased by nearly 200% in recent weeks. It averaged N288 per liter in January this year and has climbed to as high as N625 per liter in some places. The cost of gas is also increasing and there are also large increases in electricity tariffs.
  • Responding to the currency crisis faced by manufacturers, Yusuf said, “Several manufacturers are unable to import vital raw materials due to the shortage of foreign exchange, a situation that is severely hampering their production and productivity. Many are forced to source foreign currency from the parallel market at exorbitant rates. Manufacturers have yet to recover from the shocks of the pandemic and subsequent recession. “

He also said that manufacturers are struggling with unfair competition, especially from products imported from Asia which have flooded the Nigerian market, largely due to porous borders. These imports are often much cheaper than locally produced goods.

He added that the cost of logistics continued to rise, mainly due to road conditions, limited freight capacity of the railway system, crisis in major ports, traffic jams trafficking around Lagos ports and extortion. in the supply chain.

What you should know

  • Nairametrics reported that the Federal Government has announced the introduction of an excise duty of N10 per liter on all soft, carbonated and sugary drinks in the country.
  • The tax is part of a new policy promulgated by President Muhammadu Buhari in the Finance Act, which was enacted alongside the Appropriation Bill 2022 on December 31, 2021.
  • The Nigeria Labor Congress (NLC) has called on the federal government to halt proposals to reinstate excise duties on domestically produced soft drinks and carbonated beverages.
  • The beverage industry, according to the union, will lose N1.9 trillion in sales revenue, as well as N197 billion in corporate income tax, VAT and higher education tax, compared to revenues public total estimated at 81 billion naira.