Soft drink manufacturers threaten to down tool over N10/litre sugar tax
Story from Abah ADAH, Abuja
Soft or carbonated drinks producers have threatened to shut down operations over Nigeria’s imposition of an N10/litre sugar tax.
The Micro, Small and Medium Enterprises (MSMEs), stated that it would cost a manufacturer of soft drinks about N4.8 million yearly to complete the registration process and abide by other mandatory charges imposed by the Nigeria Customs Service (NCS).
According to a report by the Punch, an ex-president of the Nigeria Association of Small Scale and Industrialists, Segun Kuti-George, said the federal government was wrong to impose the N10/litre tax on carbonated drinks for manufacturers across the spectrum.
The manufacturers said the stringent measures imposed by the Customs over the sugar tax by the Nigerian government are harsh, warning that due to the recent developments they might shut down operations as they could not meet the conditions.
Kut-George said while big firms can afford the tax, almost all micro, small and producing carbonated drinks would go out of business under the current regime going by the demands of the Nigeria Customs Service. He said Nigeria Customs is saying they will attach a Customs officer to every manufacturer, saying the process has already begun.
He said that manufacturers must register with Customs with N2 million and provide an office and accommodation for the officer attached to each manufacturer with a sitting room, toilet and kitchen. They are also required to provide room furniture and fitting at the cost of N1 million.
As the manufacturers ask for government’s intervention, Kuti-George said that the manufacturers would also provide transport and feeding costs of N1500 daily for 26 days monthly. He said that manufacturers must sign an N220,000 bond with Nigeria Customs estimated at almost N5 million annually.
There have been reports that many MSMEs are already shutting down operations due to the high-handedness of Customs officers and surging costs of operations and production. The manufacturers appealed to the Nigerian government to intervene before operators leave the business.
Legit reports that three months after implementing the federal government’s N10 per litre excise duty on all non-alcoholic, carbonated and sweetened beverages, soft drink manufacturers have devised coping mechanisms, including an increase in prices.
According to reports, despite initial opposition to the policy, which kicked-off on June 1, 2022, in the 2021 Finance Act, the concerned manufacturers have placed the additional cost on consumers by increasing the prices of their products and have begun remittances to the federal government.
