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NLC to Government: Tax increments on non-alcoholic, carbonated drinks will inflict more hardships on Nigerians

Non-Alcoholic, Carbonated Drinks in a Supermarket Photo: Dreamstime

*The Nigeria Labour Congress maintains the Federal Government’s proposed tax increments on non-alcoholic, carbonated and sugary drinks will result in mass hunger besides pricing the products beyond the reach of several consumers

Isola Moses | ConsumerConnect

The Nigeria Labour Congress (NLC) has said that the Union differs with the Federal Government on the proposed increases in taxes on non-alcoholic, carbonated and sugary drinks in the country.

ConsumerConnect reports the Labour Union stated that it is concerned about possible mass hunger that would result from the slightest increase in the retail prices of soft drinks owing to imposition of excise duties.

Comrade Ayuba Wabba, mni, President of NLC, in a statement issued to reporters in Abuja, FCT, explained the Union’s position of rejecting plans by the Federal Government to increase taxes on non-alcoholic and carbonated drinks.

The Union also contended that the proposed measure would result in pricing the products beyond the reach of many Nigerian consumers.

Recall the Federal Government earlier had announced the increased taxes as a way of discouraging over-consumption of sugar, diabetes, checking obesity, and also generating more Boney to fund the 2022 Budget.

Nevertheless, the NLC has insisted that it believes implementing such increases in taxes on non-alcoholic and carbonated drinks, as one of the provisions in the 2021 Finance Act, will rather impose more hardship on the citizenry.

The statement also noted: “In a letter dated 27th November, 2021, the Nigeria Labour Congress wrote to the President and Commander-in-Chief of the Armed Forces of Nigeria, President Muhammadu Buhari, GCFR, and the leadership of the two chambers of the National Assembly, pleading that government should suspend the implementation of the excise duties on non-alcoholic, carbonated and sugary drinks.

“The Congress provided a number of very cogent reasons why government should not go ahead with the decision to impose fresh taxes on soft drinks.”

Wabba said: “One of the reasons we advanced was that the re-introduction of excise duties on non-alcoholic, carbonated and sugary drinks will impose immense hardship on ordinary Nigerians who easily keep hunger at bay with a bottle of soft drink and maybe a loaf of bread.”

Concerns of manufacturers of soft drinks

According to the Nigeria Labour Congress, the Union had been alerted to the complaint of manufacturers of soft drinks in the country over the re-introduction of excise duties.

The Labour stated they expressed concern that the government’s proposal would lead to a “very sharp decline in sales, forced reduction in production capacity, and a certain roll back in investments with the certainty of job losses and possibly shut down of manufacturing plants.”

In its comparative analysis, NLC further said “Nigerians would recall that this was also the complaint of tyre manufacturing companies, such as Dunlop and Michelin which was overlooked by government until the two companies relocated to neighbouring Ghana.

“A similar situation is playing out with the soft drinks manufacturing sub-sector. Government should pay attention.

With 38% of the entire manufacturing output in Nigeria and 22.5% share representation of the entire manufacturing sector in Nigeria, the food and beverage industry is the largest industrial sub sector in our country.”

It also stated: “The food and beverage sub-sector has generated to the coffers of government N202 billion as VAT in the past five years, N7.3billion as Corporate Social Responsibility and has created 1.5million decent jobs both directly and indirectly.

“There is thus no gainsaying the fact that the industry is a golden goose that must be kept alive.”

“The health reason proffered by government as reason for the reintroduction of the excise duties seems altruistic.”

Wabba said: “Yet, we are amiss why the government did not place the excise duties on sugar itself as a commodity rather than on carbonated drinks.

“The truth of the matter is that an additional increase in the retail price of carbonated drinks would put more Nigerians at risk of serious health challenges as many people would resort to consuming sub-standard and unhygienic drinks as substitutes for carbonated drinks.”

The Union also noted: “The appeal to rescind the re-introduction of excise duties on non-alcoholic drinks becomes even more compelling when the projected immediate revenue expected from the policy is weighed against the potential long-term loss to both manufacturers and government.”

The NLC, therefore, urged the National Assembly (NASS) to urgently amend the sections of the Finance Act 2021, which re-introduced excise duties on non-alcoholic and carbonated drinks in the Nigerian economy.

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