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Published On: Wed, Apr 18th, 2018

Coalition threatens litigation over Duty increase on Alcoholic, Tobacco products

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By Musa Adamu

The federal government has been handed 30 days ultimatum to reverse its 500% Duty increase on Alcoholic beverages and Tobacco product or risk Court action.
Addressing the press yesterday in Abuja on behalf of the Business Renaissance Group (BRG)and Sustained Development Collective (SDC), Chief Omife I. Omife, said unless the Minister of Finance, Kemi Adeosun, reverted to status quo, the federal government would be dragged before a Court of one month’s time.
He accused the Minister of failure to consult with stakeholders such as the local producers/distillers, blenders association of Nigeria before the increase, describing it as “doubly sad.”
Chief Omife said if the increase was left to stand it would put the industry’s over N420 billion investment at risk as investors would look elsewhere with a more favourable investment climate.
He further warned that nothing should be done to endanger an industry that currently employs 250,000 Nigerians, adding that the development had the potential to turn Nigeria into a dumping ground for foreign made beverages and tobacco product.
He emphasised that if nothing was done, the new tariff would lead to factory shutdown, especially in the low price segment which accounts for 78.65% volume of the Spirits and Wines segment.
He said: “ The Wine and beverages industry is one the few surviving sectors of the Nigerians economy and all patriotic and men of good conscience should strive to ensure that the sector flourishes. Nothing should be done to endanger a sector which currently employs about 250,000 Nigerians both directly and indirectly with an investment portfolio of about N 420 billion.”
Emphasising that the local Sprits industry was not just about Alcohol,
he said the increase would also have adverse effect on the packaging industry.
“If anything, this is a misplaced attack on the local Spirits industry as imported spirits and by extension smuggled wines with take over Nigeria markets since the indigenous Spirits will not be able to survive the astronomical increase.”
Given the challenges of border control and illicit market, he argues further, the attractiveness of the price increase driven by higher Duty will result in smugglers bringing in massive influx of unregistered and untaxed products with attendants revenue loss to government.

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