Distillers and Blenders Association of Nigeria (DIBAN) has urged the Federal Government to stop the implementation of the new excise duty on locally produced alcoholic beverages and tobacco, insisting it could affect the companies’ operations and results in massive job losses.
At a press briefing jointly addressed by Chief Patrick Anegbe, Chairman, DIBAN, the group noted that the new tax regime was an attempt by the Minister of Finance, Mrs. Kemi Adeosun to foist an IMF agenda on Nigeria.
He revealed that the new duty approved for implementation by the minister translates to an increase in duty from the current average of N30 per litre to N150 per litre in the first year and N200 per litre subsequently.
He noted that the implementation could hurt the economy and result in high rate of smuggling of foreign wines and spirits into the country.
Furthermore, Anegbe said that this translates to an increase from the current average duty of N270 to N1, 350 per case (carton) in the first year and N270 to N1, 800 per case (carton) from the second year.
Recall that the Federal Government had on March 11th proposed to amend the excise tariff rates for alcoholic and tobacco products in the country which took effect on June 4.
According to the new taxes, a stick of cigarette will attract a N1 specific rate per stick (N20 per pack of 20 sticks) in 2018, a N2 specific rate per stick (N40 per pack of 20 sticks) in 2019 and N2.90 specific rate per stick (N58 per pack of 20 sticks) in 2020.
Also, beer and stout would attract N0.30 per centilitre (Cl) in 2018 and N0.35 per Cl each in 2019 and 2020. Wines would attract N1.25 per Cl in 2018 and N1.50 per Cl each in 2019 and 2020, while N1.50 per Cl was approved for Spirits in 2018, N1.75 per Cl in 2019 and N2.00 per Cl in 2020.
To cushion the effect of the new tax law some companies have revealed plans to increase their local content capacity thereby lowering cost of production.