‘20% Excise On Beverages, Tobacco Will Cripple MSMEs’

Some economists and industrialists have faulted the proposed 20 per cent excise on carbonated and non-alcoholic beverages, saying it would adversely affect Micro, Small and Medium Enterprises (MSME) operators.
The Former Chairman, Nigerian Association of Small Scale Industrialists (NASSI), Mr Segun Kuti-George,  in an interview with The Tide source noted that MSMEs were already overburdened by several challenges.
According to him, the country cannot continue to look for money with the wrong policies to the detriment of small businesses.
He noted that while large companies such as Coca-Cola could bear the burden of additional tax and sometimes pass the burden to consumers, smaller operators in the beverage industry could not.
Reports said that the Federal Government on June 29 proposed a 20 per cent excise on alcoholic, non-alcoholic beverages and tobacco.
Kuti-George proposed the exemption of those categories of operators and the reduction of the previously added N10 excise to N1 for MSMEs.
“An already tax burdened MSME would likely fold up, thereby releasing employees into the already crowded employment market, leading to increased crime rates.
“So, what can happen is to exempt MSMEs from these charges or reduce the charges so that they can survive while government makes money,” he said.
Founder, Centre for the Promotion of Private Enterprises (CPPE), Dr Muda Yusuf,  stated that the 20 per cent tax proposal would hurt the food and beverage sector, hinder manufacturing performance and add more to the country’s inflationary pressures.
According to him, players in the food and beverage sector and manufacturing generally are burdened by high production and operational costs, multiple taxation among others.
As a result, Yusuf stressed that it was unfair to contemplate an additional tax on the already struggling sector.
An economic analyst, Mr Teslim Shitta-Bay  said government projected N81 billion should the additional excise be successful, the N10/per litre tax on carbonated non-alcoholic drinks had already led to a 16 per cent fall in industry revenue.
Given that, he affirmed that the ugly scenario which would be created would affect the overall economic productivity the government was trying to protect.