NLC President, Mr Ayuba Wabba
NLC berates FG over new tax on soft drinks, says policy will trigger job losses, mass hunger
Nigeria Labour Congress (NLC) says it rejects the planned introduction by the Federal Government of N10 tax per litre on all non-alcoholic, carbonated and sweetened beverages produced in the country.
It would be recalled that Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, had, last Wednesday, in Abuja, announced a new tax on non-alcoholic beverages in the country to shore up the country’s revenue base.
The minister who explained that the policy was aimed at discouraging excessive consumption of sugar contained in the beverages, which contributed to diabetes, obesity, and other diseases, added that it is intended to raise revenue for critical expenditures.
However, reacting to the development, the NLC President, Ayuba Wabba in a statement, criticised the policy, saying that it would impose more hardship on Nigerians, especially those who keep hunger at bay with a bottle of soft drink and a loaf of bread.
Wabba argued that the policy would lead to mass hunger and job loss in companies that manufacture soft drinks due to a decline in sales arising from the re-introduction of excise duties on their products.
“Our concern is the mass hunger that would result from the slightest increase in the retail price of soft drinks owing to the imposition of excise duties as it would be priced beyond the reach of many Nigerians.
“Congress was also alerted by the complaint of manufacturers of soft drinks in Nigeria that the re-introduction of excise duties 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.
“Nigerians would recall that this was also the complaint of tyre manufacturing companies such as Dunlop and Michelin which was overlooked by the 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. The food and beverage sub-sector has generated to the coffers of government N202 billion as VAT in the past five years, N7.3 billion as Corporate Social Responsibility, and has created 1.5 million 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 labour leader said.
Wabba added that the 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 drinks as substitutes for carbonated drinks.
