Experts have allayed fears of possible increment in the retail price of carbonated drinks following the recently introduced excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages.
Recently, the Federal Government through the Minister of Finance, Budget and National Planning, Zainab Ahmed, imposed excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages.
As part of its reason, the government fingered heavy intake of sugar both by the old and young for the imposition of the excise duty of N10 per litre on all these products, even as it believes that the excise duty on soft drinks would discourage excessive consumption of sugary beverages which contributes to diabetes, obesity among others.
The experts argued they do not expect the newly introduced excise duty to affect the retail price of carbonated soft drinks in the country as the cost can be easily absolved by the big-time manufacturers.
Davey Ugwuadu, an Accountant and tax expert said the implication of the N10 per litre excise duty ought to be more on the manufacturers.
According to him, the big-time manufacturers should be able to absorb the extra cost without tampering with the retail price of their products because doing that may boomerang.
“Note that the products we are talking about here are highly elastic in demand, it is not something we cannot do without. The manufacturers will look at the middle ground to see what they can do to maintain their sales volume. Which is what profit is all about.
“For me, I expect the big players like Nigerian Bottling Company and 7up Bottling Company to absolve the cost and not bother to tamper with their retail price,” he said.
Continuing he said, we know that the government is looking for money, hence the new excise duty.
“Without a doubt, the new policy is an additional pain for the manufacturers, the question is what the government will gain from the additional cost, will the consumer gain them, and will the money reflect in governance? Or will the extra revenue go the usual way where the money raised from taxes go?
For Muyiwa Akintunde, PR expert and lead Consultant, Leap Communications, while one expects businesses to absolve the additional cost, “we should realize that the business owners themselves will say that considering all the projects they engage in, in their CSR programs- they fix the road, construct boreholes for communities and the like after which they still pay taxes, will this decision not further stretch them?
“For me, the whole thing is like putting the cart before the horse. Paying taxes is good, however, people want to know that their taxes count and that the government is actually using the resources from taxes to their collective advantage and when we have that, it will be easy for people to respond to tax payment without being forced to it.
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