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Disquiet at DIBAN over planned hike in excise duties, taxes on wines, spirits

Members of the Distillers and Blenders Association of Nigeria (DIBAN), a Sub-Sectoral Group of Manufacturers Association of Nigeria (MAN), have written an open letter to President Muhammadu Buhari, decrying that the proposal by the Federal Government for an upward review of excise duties, levies/tax on locally produced wines and spirits will kill their means of livelihood.

The group in the letter made it clear that apart from their over N420bn investments so far in the sub sector, a whooping volume of 10,000 directly and 15,000 indirect jobs will be on line if the policy takes effect.

In the letter signed by Chairman of DIBAN, Mr. Patrick Anegbe, the group argued that “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”.

“Besides, BIDAN contributes in corporate tax and Value Added Tax (VAT), approximately N60 billion per annum.

Part of the letter noted that “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”.

“The proposed excise duty which it described as discriminatory, DIBAN said the three- year staggered excise duty are; beer: N30, N35, N35 (average N34 per liter), wine: N125, N150, N150 (average of N142 per liter) and spirits; N150, N175,N200 (average of N175 per liter).

“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 N6 per liter, while that of the wine is N114 per liter and spirit N147 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 N250 per bottle and a massive increase in the excise duty ranging from average of N142 to N175 per liter is a decision to kill the industry. This will also put the local manufacturers at disadvantage against imported brands,’’ Anegbe argued, stressing that “It may be out of place for a government preaching economic diversification to introduce levies capable of killing emerging sectors of the economy”.

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