By Godwin Oritse

THE Manufacturers Association of Nigeria, MAN, has warned that the introduction of the Excise duty on non-alcoholic drinks will lead to a loss of N1.9 trillion in sales revenue in three years if the policy is not halted.

It was also said that the policy will lead to a contraction of the manufacturing sector by 0.43 percent, a development that will further worsen the economic situation of manufacturing firms.

Speaking at a one-day Business Discourse on ‘’X-raying the proposed Excise duty regime for carbonated beverages in a recovering economy,’’ Chairman of the Fruit Juice Manufacturing Group of MAN, Mr. Fred Chiazo said that introducing the Excise duty would be counterproductive to the Federal Government’s Sugar Master Plan adding that the sugar industry would be hard hit when volumes plummet as a result of the policy.

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Chiazo also said that Excise will significantly increase prices of the products, which will lead to upsurge in illicit trade and counterfeiting due to substitution effect.

He stated: ‘‘There is a real concern that the industry cannot cope with persistent tax increases. There have been multiple tax increases in recent times-excise duty was increased on alcoholic beverages in 2018 and Value Added Tax, VAT, was increased in 2020.

‘’The beverage sub-sector of the Food and Beverage sector will lose up to N1.9 trillion in sales revenue between 2022 and 2025 indicating a 39.5% loss due to imposition of the new taxes with concomitant impact on jobs and supply chain businesses.

‘‘Excise will shrink the sector’s contribution to the Gross Domestic Products which is 35 per cent of the manufacturing.’’

“Manufacturers also grapple with other challenges such as forex restriction and currency devaluation. Introducing Excise on non-alcoholic beverages is likely to cause a 0.43% contraction in output and about 40 percent drop in total industry revenue in the next five years.

MAN however demanded the suspension of the policy till 2022 and a review in 2023 so that stakeholders can make input before the policy is implemented.