The carbonated soft drinks sub-sector of the Manufacturers Association of Nigeria (MAN) has rejected the proposed 20 percent tax on non-alcoholic drinks, the association disclosed at a meeting held in Lagos on Friday.
According to MAN, the proposed tax will collapse the carbonated soft drink sub-sector if implemented, noting that the new policy could be a setback for the sector.
The new proposed policy was announced following a N10 per litre tax policy imposed on non-alcoholic drinks earlier this year, Investors King understands.
The minister of finance, Zainab Ahmed had claimed the policy was implemented to “discourage excessive consumption of sugar in beverages which contributes to diabetes, obesity,” and to increase revenue generation.
The carbonated soft drinks sub-sector of the Manufacturers Association of Nigeria (MAN) lamented that the sub-sector is already feeling the adverse impact of the N10 per litre policy, therefore introduction of a new 20 percent tax regime will cripple its growth.
A recent report has shown an 8 percent decline in revenue of the sub-sector between June and August 2022, a direct result of the excise tax duty. Experts are predicting an additional decline in revenue to -25% by December 2022 if the policy is not reviewed.
Similarly, they identified unemployment as one of the resultant effects of the new policy and warned it could lead to job loss and subsequently push unemployment above the current 33.33 percent.
‘’Most certainly the additional 20 per cent 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,” it stated.
The Nigeria Bureau of Statistics (NBS) puts the jobs created by the subsector in the last years at 1.5 million jobs, both direct and indirect.
