Home Sectors BUSINESS & ECONOMY Finance Act Is Bankrupting Us – Soft Drink Manufacturers

Finance Act Is Bankrupting Us – Soft Drink Manufacturers

Finance Act Is Bankrupting Us - Soft Drink Manufacturers

The national assembly has been asked by major players in the soft drink industry to protect businesses from going bankrupt due to the ₦10/litre excise duty tax imposed on the industry.

They stated this during a meeting with the leadership of the National Assembly on Wednesday in Abuja.

The federal government imposed a ₦10/litre excise duty on all non-alcoholic, carbonated, and sweetened beverages in January. The duty is included in the finance act, which President Muhammadu Buhari signed into law on December 31, 2021.

The Manufacturers Association of Nigeria (MAN) carbonated’s soft drinks sub-sector had lobbied against the tax.

On behalf of the producers, Segun Apata, chairman of Nigerian Bottling Company (NBC) Limited, told the National Assembly that the tax burden could lead to the sector’s demise.

“We have come to you that the sector is about to collapse. We don’t want to go into the public to announce this is happening to us without placing it before you as leaders of this country,” Apata said.

“The finance act imposes an excise tax on all non-alcoholic beverages. In our sector, the taxes we pay — company tax, VAT, education tax — are over ₦300 billion.”

In response, Lawan stated that the national assembly would continue to protect the country’s businesses and address the ₦10/litre excise duty tax on carbonated beverages.

“I have listened to your submissions. I want to assure you that everything that we do as a government, an administration, we do so to promote, support, protect and foster businesses in our country,” he said.

“You are the owners of the businesses. You invested in the soft drink industry in Nigeria.

“But Nigerians are the beneficiaries because in addition to drinking the soft drink, our citizens also get jobs and for those reasons, it is always at the forefront of our considerations and focuses that we must enhance the business environment in Nigeria and create ease of doing business in Nigeria.

“Besides, we are also conscious that the world is a global village. There are so many other areas to which somebody could easily move out. We don’t want to lose businesses in Nigeria to our competitors. So we have to have a competitive environment here.

“I have taken note of how long you have been in Nigeria. The fact that you have stayed for 70 years (NBC) tells that the Nigerian environment has provided you with the opportunity to invest and reap from your investment because it is a symbiotic relationship.

“While you are making profits from your business, we are also getting jobs and other benefits.

“I want to assure you that when the Finance Act 2022 was passed into law, we did so unconsciously, trying to address the issues, not trying to overburden your businesses.”

Top executives from major industry players such as Seven-Up Bottling Company Limited, La Casera Company, Rite Foods Limited, and Nigerian Bottling Company Limited were in attendance.

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