The Distillers and Blenders Association of Nigeria (DIBAN), a Sub-Sectoral Group of Manufacturers Association of Nigeria (MAN), has raised the alarm over the threat to its ₦420 billion investment due to the recent proposal to increase excise duties.
The group, in an open letter to President Muhammadu Buhari, said the proposal by the Federal Government for an upward review of excise duties, levies/tax on locally produced wines and spirits will equally threaten 10,000 and 15,000 direct and indirect jobs respectively.
Its chairman, Mr. Patrick Anegbe, said its products are not luxury items and are consumed largely by the low end and mainstream, warning that any huge adjustment in products occasioned by high excise duty will lead to low demand and workers’ layoff.
He disclosed that the estimated contribution of BIDAN in corporate tax and Value Added Tax (VAT) is approximately N60 billion per annum.
“The spirit/wine industry ranks among the oldest and still surviving sector of the economy, provides gainful employment for thousands of Nigerians. More importantly, the Distillers and Blenders sub-group of MAN has been very supportive of the Nigerian state through its discharge of its statutory obligation-payment of relevant duties, taxes and excise,’’ BIDAN said.
Given a further breakdown of the proposed excise duty which it described as discriminatory, DIBAN said the three- year staggered excise duty are; beer: ₦30, ₦35, ₦35 (average ₦34 per liter), wine: ₦125, ₦150, ₦150 (average of ₦142 per liter) and spirits; ₦150, ₦175, ₦200 (average of ₦175 per liter).
DIBAN said, while it has always been at par with the beer sub-sector on excise duty payment for over two decades, the proposed increase for the beer sector is ₦6 per liter, while that of the wine is ₦114 per liter and spirit ₦147 per liter, alleging that this is a clear case of discrimination against the Wine and Spirits sub-sector.
‘‘This is a clear case of discrimination and an attempt to kill the wine and spirits sub-sector in favour of the beer sub-sector for reasons that are difficult to understand.
It may interest you to know that most locally produced brands are currently priced at about ₦250 per bottle and a massive increase in the excise duty ranging from average of ₦142 to ₦175 per liter is a decision to kill the industry. This will also put the local manufacturers at disadvantage against imported brands,” Anegbe warned.