MAN Urges Government to Suspend Excise Duty Increase and Reverse Single Use Plastics Tax

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The Manufacturers Association of Nigeria (MAN) held a press conference at MAN House in Ikeja, Lagos on Tuesday, 16th May 2023, to address their concerns regrding the recently released 2023 Fiscal Policy Measures (FPM) by the Federal Ministry of Finance, Budget and National Planning. MAN raised significant issues regarding the excessive increase in excise rates for alcoholic beverages and tobacco, as well as the introduction of a tax on Single Use Plastics (SUP).

MAN expressed deep concern over the exorbitant increase in excise rates, which they believe is not consistent with global best practices. They highlighted that the manufacturing sector is currently facing an acute recession due to various challenges, including naira scarcity, limited access to foreign exchange, inflation, and a struggling economy. The industry has already experienced a decline in profitability, and further increases in excise rates will exacerbate the situation, leading to potential production cuts, job losses, and a decline in exports.

The association emphasized that the rate of excise increase is exceptionally excessive, with some products experiencing a tripling of excise. They pointed out that the burden of these increases will ultimately be passed on to consumers, who are already facing stretched disposable incomes. This could result in consumers seeking alternative products from unapproved channels, leading to a surge in illicit trade and a decline in tax revenue for the government.

MAN also highlighted the negative impact of the excise increase on the manufacturing sector’s value chain, which includes agriculture, logistics, bottling, packaging, and distribution businesses. Over 950,000 direct and indirect employees are at risk, and the decline in sales volumes could have a multiplier effect on the national economy.

In addition to the excise increase, MAN expressed concerns about the Single Use Plastics tax, stating that it does not appear to have a legal basis and will further fuel inflation without achieving the desired environmental objectives. They suggested engaging with relevant stakeholders to explore alternative initiatives, such as the Food & Beverage Recycling Alliance, which has been approved by the federal government.

As a result, MAN respectfully requested the federal government to suspend the 2023 FPM on excise duty and retain the 2022-2024 excise duty roadmap to ensure stability in the affected sectors and their value chain. They also urged the government to reverse the tax on Single Use Plastics and consider alternative measures to achieve revenue objectives in a sustainable manner.

Otunba Francis Meshioye, President of MAN, concluded the conference by highlighting the significance of addressing these concerns to safeguard the manufacturing sector and support the national economy.

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