By Victor Young
Employers in the food and beverage industry, on the platform of Association of Food Beverage and Tobacco Employers, AFBTE, has raised the alarm over an increasingly harsh operating environment, saying excessive taxation and negative effects of COVID-19 pandemic have been undermining members’ survival strategies.
At its 41st Annual General Meeting, AGM, held virtually in Lagos, AFBTE called on federal, state and local governments to collaborate with the sector in promoting the required environment for it to flourish.
Reviewing the operating environment of members and the association’s activities in the last one year, President of AFBTE, Chief Patrick Anegbe, lamented the uncertainties surrounding the environment because of the effects of COVID-19.
He said: “Some of the effects are the partial opening of the economy, the crash in the oil market and, by implication, the crash of the dollar and other convertible currencies; restriction in international trade; and poor GDP performance in 01 2020.
“It was 1.87%, a figure close to what was recorded in the three quarters of 2018 and was not less than 2% in 2019.
“As recently disclosed by the Finance Minister, the country is heading in the direction of a recession. The above portends that the future is bleak. This calls for proactive measures by member-companies to reduce the negative impact of the pandemic on their businesses.
“This development also calls for clarity and unity of purpose on the part of government and its agencies. Besides, it requires the latter to ensure that its directives are obeyed by those concerned at all times.
“An example is the refusal of terminal operators and shipping companies to comply with the directives of the Nigerian Ports Authority, NPA, and the Nigerian Shippers Council, NSC, not to charge demurrage during the period of the lockdown.”
According to him, besides the increase in Value Added Tax, VAT, from five percent to 7.5 percent, through the Finance Act, 2019 which became effective on February 1, 2020, the President noted that apart from “the Federal Government’s laws, regulations, tariff adjustments and the likes, which have posed problems to business operators, state legislation, regulations, upward tariff revision all aimed at increasing revenue was also of concern to companies in the year.
“The legacy issues such as the Lagos State government’s Land Use Charge, Ogun and Lagos States Water Abstraction Charges and multiple tax imposition remained on the front burner.
“Local governments also stepped up their revenue drive by making unnecessary demands. The effect of all the above was increasing distraction of the respective company management who had to spend valuable time addressing many demands for payment coming from the various government and their agencies,” the leader of the food and beverage industry employers’ union added.