News

November 30, 2022

Drink Manufacturers: We will address 10 percent tax – Lawan

By Henry Umoru 

ABUJA- THE President of the Senate, Senator Ahmad Lawan yesterday assured the manufacturers of non-alcoholic beverages in Nigeria that the National Assembly would  address their concerns with respect to the implementation of the Finance Act 2022.

Top officials of major players in the industry, drawn from Seven-Up Bottling Company Limited, La Casera Company, Rite Foods Limited and Nigerian Bottling Company Limited, complained to the leadership of the Senate on Wednesday that the tax burden could lead to the collapse of the sector.

Receiving the Manufacturers in his office, the  Senate President assured them that the parliament would look into their complaints particularly with respect to the excise duty.

The Finance Act 2022, among other things, imposes 10 percent tax on non-alcoholic beverages.

According to a statement by his Special Adviser, Media, Ola Awoniyi, Lawan said: “I have listened to your submissions. I want to assure you that everything that we do as a government, an administration, we do so to promote, to support, to protect and foster businesses in our country.

“You are the owners of the businesses. You invested in the soft drink industry in Nigeria. But Nigerians are the beneficiaries because in addition to drinking the soft drink, our citizens also get jobs and for those reasons, it is always at the forefront of our considerations and focus that we must enhance the business environment in Nigeria and create ease of doing business in Nigeria.

“Besides, we are also conscious that the world is a global village. There are so many other areas to which somebody could easily move out. We don’t want to lose businesses in Nigeria to our competitors. So we have to have a competitive environment here.

“I have taken note of how long you have been in Nigeria. The fact that you have stayed for 70 years(NBC) tells a story that the Nigerian environment has provided you the opportunity to invest and also reap from your investment because it is a symbiotic relationship. While you are making profits from your business, we are also getting jobs and other benefits.

“I want to assure you that when the Finance Act 2022 was passed into law, we did so unconsciously, trying to address the issues, not to trying to overburden your businesses.

“Actually, the Finance Act is one way of responding to global situations that every country today faces and it is not peculiar to Nigeria. But, of course, when you pass law, you find how efficacious the law is when you started to implement it.

“Maybe we are talking about the 10 percent tax. I have noted what you have said about it. You think It is a heavy burden that can make your businesses difficult to survive. And that is not the kind of consequence that we anticipated or hoped and as a parliament that passed the law, we will look at the law and see how everybody will be protected.

“On one hand, Nigeria needs some revenue. Just like many other countries, even bigger economies are challenged today. But on the other hand, even though we need revenues, we have to be conscious of the fact that we don’t kill or overburden or stress the goose that lays the golden egg.

“We will like the goose to continue to lay the golden eggs so that at the end of the day, it is better to have something coming into the coffers of government than to have capital flight and lose everything.

“But like I have said, it is not something that I can say, well, the 10 percent is off. We will look at it and see how we can arrive at something and accommodation that everybody will be a winner at the end of the day.

“We will work and try to address the issue that you have raised and that we will try to do as quickly as possible so that we have a situation where at the end of the day, you will be happy and Nigerians will also be happy.

“What we are experiencing today is what most countries are experiencing. Even bigger economies are suffering from so many challenges – from COVID 19, now to the infamous Russia/Ukraine war and so on and so forth. But our understanding is that this is not going to be a permanent situation. That these challenges will soon go away. We will try to take very progressive measures to ensure that we address your concerns.”

Earlier in his remarks, the spokesman for the delegation and Chairman of the Nigerian Bottling Company Limited, Ambassador Segun Apata who  appealed to the Senate President for urgent intervention to save the sector from total collapse, said, “We have come to you, that the sector is about to collapse. We don’t be want to go into the public to announce this is happening to us without placing it before you as leaders of this country.

“The Finance Act imposes an excise tax on all non-alcoholic beverages. In our sector, the taxes we pay – company tax, VAT, education tax – are in excess of over N300 billion.

“Our appeal is to ask the National Assembly under your leadership to completely remove the excise tax and return to status quo ante before first of June this year “