Tax, fiscal policy, and economics experts have hailed the Federal Government for suspending the proposed increases in excise duty rates on tobacco, alcoholic and non-alcoholic beverages.
According to The Nation, the increases were to be part of the 2023 Fiscal Policy Measures and Tariff Amendments.
Renowned expert in tax and fiscal policy and the Head of Tax and Fiscal Policy at PricewaterhouseCoopers Nigeria,Taiwo Oyedele, praised the Federal Government for listening to the legitimate concerns expressed by players in the industry and engaging with them while postponing the proposed increases in excise duty rates.
He stated that the plan had piqued the interest of key players and organized private sector organisations.
During an interview on Arise Xchange, a business program on Arise TV, Oyedele stated that the government could not afford to execute an excise rate increase.
He claimed that doing so would not only exacerbate the manufacturing sector’s current plight, but would also cause additional economic suffering for the people.
“Glad to hear that the government is no longer going ahead with the proposed increases, it is great that the government, through the Federal Ministry of Finance and the Fiscal Policy Reform Committee, is yielding to the clamour of experts and industry stakeholders.
“I recommend a more collaborative and evidence-driven approach going forward for future changes,” he said.
Similarly, a development economist, Kunle Oshobi, urged the government against the proposed increases in excise tax rates for 2023-2024.
He feels the move amounts to policy inconsistency, which could cause economic distrust, investor skepticism, and disrupt planned private investment.
He expressed grave concern about the beer sector’s precarious outlook in Nigeria, despite long-standing investments in the entire chain.
Oshobi said it was inappropriate for the government to bring more suffering to an already burdened sector hoping to recover.
According to him, implementing the idea based on assumptions rather than data could create further issues in an already uncertain business environment.
Another economist and policy analyst, Osas Akinbo, stated that increasing excise duty on beverages in this economic climate would surely impose a hardship on consumers and beverage businesses.
Data from the industry, he claims, show that demand for beverage items is not inelastic.
Akinbo went on to say that any further increase in excise duty would most certainly have a net negative effect on long-term government income, national GDP, and Nigeria’s corporate image, eroding investor confidence in a market already plagued by volatility.