Yemisi Izuora
The Manufacturers Association of Nigeria, MAN, has sought some adjustments
on some of the approvals made by the Federal Government as provided for under the Supplementary Protection Measures (SPM) on Annex I, II and III of the 2023 Fiscal Policy guidelines, which is in support of MAN agenda of Resource-based Industrialization.
The Director General, DG, of MAN, Segun Ajayi-Kadir, after reviewing the newly released 2023 Fiscal Policy Measures and Tariff Amendments, thought commended Government for those approvals but however requested that in addition to the issue of Excise tax increase, Government should reconsider, the Green Surcharge – Import Adjustment Tax (IAT) on Motor Vehicle (Chapter 87).
According to him, While we support and respect government’s opinion and measures aimed at addressing climate change and Nigeria’s commitment to net zero emission, it would have been better if we exercise some level of strategic caution and allow for a period of realistic transition to clean energy.
“This is considering the fact that most of our members engage logistics companies, majority of whom are in the Small and Medium-scale Enterprise (SMEs) cadre, who would need some time to migrate to green fuel and who lack the financial capacity to purchase electric vehicles. Anything short of this will increase the input cost of products culminating in un-competitiveness as well as eliminating many SMEs in the logistics downstream of the manufacturing sector.”
Another issue raised by the Association is the Single Use Plastic Surcharge of 10 per cent.
He noted that the surcharge of 10 per cent on Single Use Plastic under HS Code 3919.10.00.00 and 3919.90.00.00 as well as Headings – 39.20; 39.21 and 39.23 (Plastic Containers, Films and Bags), appears ill-timed and hasty in view of the fact that Government, through the Federal Ministry of Environment, is currently working towards instituting a Plastic Cycle Waste Management Policy with technical assistance from the United Nations Industrial Organisation (UNIDO) along with support from the Japanese government.
The project is to institute a long-term solution to manage the menace of plastic wastes and assist the affected industries to retrofit, thereby reaching the threshold of the United Nations goal of green environment as being espoused by the series of the UN organized Conference of Parties (COP).
It is therefore necessary that this process should be allowed to reach its conclusive end before other measures such as provisioned in the 2023 Fiscal policy guidelines are pronounced by Government, he advised.
Making further appeal the MAN, said, “We have earlier noted and forwarded our position on the Excise duty tax to the Government while it was being proposed in the 2023 Fiscal Policy Guidelines.
“We are again emphasising the fact that the proposed increase in the recently released 2023 guidelines i.e., on Beer, Wines and Spirits, Tobacco, has the potential to trigger unprecedented distortions in the affected industries as well as the entire manufacturing sector.
The policy is capable of producing negative effect on investments with a huge consequence on job retention in these industries. We therefore strongly recommend that Government should maintain the status quo regarding the already government-approved excise duty increases on these items in the 3-year Roadmap as contained in the 2022 Fiscal Policy Measures. This was approved by Mr. President and implementation commenced on 1st June 2022. The industry CANNOT afford any further increases at these extremely challenging times.”