The leadership of the Lagos Chamber of Commerce and Industry (LCCI) has warned the federal government against its planned move to impose excise duty on basic consumer goods including soaps and allied detergents and other Fast Consumer Moving Goods (FCMGs).
Business Hilights recalls that government recently started the enforcement of the new amendment to the excise duty rates for alcoholic beverages, spirits and tobacco products.
A statement issued by the Director-General of LCCI, Mr Muda Yusuf said “For instance, the Nigeria Customs Service’s excise duty list on its website is inclusive of many basic and essential products such as soap and detergent, toilet papers, cleansing or facial tissue and spaghetti/noodles.
“These are products consumed largely by ordinary Nigerians. Any imposition of excise duty on these products will further aggravate the poverty situation in the country and undermine the welfare of citizens. Already, poverty incidence is well over 60 per cent in the country.”
According to him, “food inflation remained of great concern in the country as data from the National Bureau of Statistics (NBS) showed that food inflation was 13.45 per cent in May, as against the core inflation of 10.7 per cent, and headline inflation of 11.6 per cent”.
“Imposition of excise duty on basic items may aggravate the poverty condition in the country. Soaps and detergents, for instance, are necessities needed to maintain basic hygiene that protect citizens from preventable diseases like diarrhoea, cholera and lower respiratory infections, among others.
While stressing that “These have significant health and social impacts on Nigerians,” Yusuf argued that “The planned extension of the new excise duty regime to cover soaps and detergents will invariably increase their prices, make them inaccessible for the common man, and further heighten their plight amid the current economic challenges that have reduced their purchasing power”.
He argued further that one of the most vulnerable sectors of the economy was the manufacturing sector, which he noted was already grappling with high operating costs and weak purchasing power, among others.
According to him, “If the government cannot give tax incentives to manufacturing firms, it should not impose additional tax burden on them, given the challenging operating environment for production in the economy.
“It is even worse when such burden is on necessities consumed largely by the ordinary people. We therefore request an urgent rethink of the proposition to increase or impose excise duty on the production of basic needs in the economy,” LCCI chief said.
