NECA seeks suspension of excise duty to preserve businesses
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THE Nigeria Employers’ Consultative Association ( NECA) has called for the suspension of the planned re- introduction of excise duty on carbonated drinks. Expressing concerns about the survival of the manufacturing sector in the new year and beyond, the employers' body said the reintroduction of the tax will lead to further stifling of businesses.
A statement by the association explained that the action will result in reduction of purchasing power of the masses as any increase in price will likely be passed to the consumers.
The association, said in 2009, during the global financial crisis, excise duties on carbonated drinks were suspended to aid the sustainability of businesses. It stated that the economic situation, which necessitated the suspension of the excise in 2009 has not abated, but is rather, worse.
It lamented that businesses currently face greater hardship than what obtained in 2009.
NECA also lamented that manufacturers in the country have been contending with the dislocations caused by the pandemic and the recession that followed.
It noted that government, in the interest of Nigerians and the economy, should suspend the re- introduction of excise duty on carbonated drinks and continue to support and promote the industry to attain full recovery after the onslaught of the pandemic and position it to further accommodate the teeming unemployed Nigerians, particularly the youths.
According to NECA, at a time like this, globally, governments continue to provide incentives for industries to speed up recovery from the shocks of COVID19 pandemic, inflation and escalating costs.
It said Nigeria cannot afford to be doing the exact opposite as manufacturers, across all product segments, need a respite, especially in the light of the unprecedented increase in production and operating costs.
It said the organised private sector in Nigeria is clamouring for business environment that will be agile, less bureaucratic and cost- effective to support general business operation, with the quest that the private sector would support the National Development Plan ( 2021- 2025) with about N298.3 trillion and lift up over 30 million Nigerians out of the poverty lines through creation of decent jobs over the period. Noting that the private sector has the potential to achieve the set target, it however, said there is need to treasure and nourish the bird that lays the golden egg, by providing the enabling business environment for businesses to thrive.
“Businesses are also facing serious crises resulting from liquidity challenges in the foreign exchange market, which is impacting adversely on the cost of production, sales, turnover, profitability and shareholder value. In addition, they are confronted with intense pressure arising from numerous structural bottlenecks that are creating sustainability challenges for investors, especially those in the SME segment," it said.