The carbonated soft drinks sub-sector of the Manufacturers Association of Nigeria (MAN) may cut jobs over the proposed 20 per cent Ad-Valorem excise tax on non-alcoholic beverages for the carbonated soft drinks (CSD) segment.
At its meeting in Lagos, the group said its effect could be worse as a N10 per litre tax regime is already crippling the sector.
The group said a study revealed that the N10 per litre excise tax which took effect between June and August 2022 showed a – 8 per cent revenue decline as a direct result of excise tax implementation. It is projected that the decline will hit -25 per cent by December 2022 if not reviewed.
“Most certainly, the additional 20 per cent tax will not only kill the sector but result in the loss of revenue by the federal government, and a consequential phenomenal loss of jobs by various layers of the Nigerian workforce,” the group, which accounts for 33% of manufacturers, said after the meeting.
The members decried the devastating effects of the N10 per litre tax which, they said, had “become burdensome with the high cost of operation in the country and its constituent elements.”
They also called for the suspension of the excise tax being proposed by the federal government to forestall the collapse of the industry.
The Corporate Affairs and Sustainability Director, Nigerian Bottling Company (NBC), Ekuma Eze, said since the introduction of the N10 per litre excise tax, businesses in the sector have been experiencing a worrisome decline.