Senate seeks suspension of new tariff on alcohol, others

Senators yesterday urged the Federal Government to put on hold the implementation of the excise tariff increment on alcoholic beverages and tobacco products.

The upper chamber said the suspension should be in force until all stakeholders  have been consulted.

It said the discussion with stakeholders should pave the way for consensus on the implementation .

The resolutions followed the adoption of the report of the Senate Committee on Finance which considered “The urgent need to review the excise tariff increment in order to save local distillers of beverages from looming extinction.”

Chairman, Senate Committee on Finance, Senator John Owan Enoh, presented the 16 page report at plenary yesterday.

The increase in the excise tariff rates on alcoholic beverages and tobacco products was approved by President Muhammadu Buhari after the adoption of the recommendation of the Tariff Technical Committee of the Federal Government.

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The main reason for the increase in the excise rate is said to be government’s drive to increase revenue generation and the belief that taxation has proved to be a veritable tool in controlling the consumption of alcoholic beverages as they have negative health effect on consumers.

The resolutions followed the adoption of the report of the Senate Committee on Finance which considered “The urgent need to review the excise tariff increment in order to save local distillers of beverages from looming extinction.”

Chairman, Senate Committee on Finance, Senator John Owan Enoh, presented the 16 page report at plenary yesterday.

The increase in the excise tariff rates on alcoholic beverages and tobacco products was approved by President Muhammadu Buhari after the adoption of the recommendation of the Tariff Technical Committee of the Federal Government.

The main reason for the increase in the excise rate is said to be government’s drive to increase revenue generation and the belief that taxation has proved to be a veritable tool in controlling the consumption of alcoholic beverages as they have negative health effect on consumers.

The Manufacturers Association of Nigeria (MAN) believes the increase will give more competitive advantage to foreign products because they will not be affected by the increment.

MAN which described the increment as “outrageous as it stands at 500 per cent” warned that “if the new rate is fully implemented after the three years incremental period, it is believed that a number of the local manufacturers will have no other option than to suspend operation.”

It suggested that 35 per cent increment at maximum should be implemented by the government as it will guarantee the survival of the industry rather than 500 per cent increment which will put the entire industry in a very difficult situation.

But the Senate said an increment of not more than 50 per cent at maximum should be adopted, “as it becomes necessary for the Federal Government to increase the tariff in order to boost revenue as the rate will provide more leniency to the affected manufacturers and give more hope for the survival of local firms.

The upper chamber also resolved that there is need to increase the import duties of foreign alcoholic beverages and tobacco products in order to give local firms more competitive edge.

It urged the government to sensitise and carry along the producers and consumers of alcohol and tobacco products to understand the need for the increase and its advantage in adding to the economic fortune of the country.

The Senate agreed that if the new excise tariff is allowed to be implemented by the government, it will stand at about 500 per cent after the three years incremental period.

It also said if the tariff is fully implemented without review, it is capable of compelling affected companies that cannot stand with the new rate to either shut down or relocate their full operation to neighbouring countries with favourable and flexible taxation policies for the sector.