The Manufacturers’ Association of Nigeria (MAN) has described as ill-timed, the plan by the Federal Government of Nigeria to increase excise on alcoholic beverages and cigarettes.
The Director-General of MAN, Mr. Segun Ajayi-Kadir who made the position of the association on the matters known in an interview with Primetime Reporters in Lagos recently said that those two products that targeted for the increment were legitimate products consumed by Nigerians which points to the that they were going to use their income that they derived from somewhere, either salary or from their businesses to pay for it.
Kadir argued that as a responsible government, it needed not to deplete an already diminished disposable income in any way adding that because the increase came at the wrong time, it was going to complicate the challenges that these sector were facing.
According to him,” Excise is a consumption tax and you do not deplete an already diminished disposable income in any way. I think it is wrong timing and I think that it is going to complicate the challenges that these sectors are facing. Also, you have to be mindful of the fact that we cannot afford a more expensive cigarettes imported into this country. One, it is not going to meet the standard that you have set; there is no way you compare that. Government is going to lose revenue because most of it is smuggled and there will be less tax paid to government because you pay excise only on products that you take to your gate. If you downsize because you are producing less, people are going to lose their jobs and those along the value chain especially those who produce the tobacco leaves are going to suffer.
“So, I mean, you need to look at the economic implications of all of these. There are processes to regulate consumption, so, it is not a moral issue that we are talking about, it’s industry. There is the tobacco law that is regulating consumption, advertisement and so on and once that is fully in place, the issue of the morality or not of the those products pales into insignificance.
“There is also regulations about advertisement of those two sectors, like the beer industry for instance, they source most of their raw materials locally, some of them are wholly sourced locally, what signal are you sending because if you make it more expensive, two things will happen, one, people will consume less, two, there will be propensity to bring in cheaper ones and then there is the need for you to downsize your workforce which will affect the whole value chain, distributors, retailers and you know so many incomes that are lined up in this areas”.
While harping on the need for government to be mindful noting that timing was also extremely important, he called for the total withdrawal of that increase or at least drastically reduce it to what is tolerable.
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