Manufactures plead with FG not to kill their businesses with multiple taxation

Some concerned Nigerian manufacturers have pleaded with the Federal Government not to further stifle the Nigerian business environment with multiple taxes.

They made the appeal against the background of another new government policy to tax plastics used by manufacturers in their production.

Manufacturers who spoke to our correspondent on the matter contended that this would amount to double taxation, worsening companies’ profitability, especially as the federal government was already collecting customs duty on raw materials during clearing at the sea port and exercise duty from beverages factories

One of them who spoke on the condition of anonymity because of likely backlash, said taxes under different names are levied entrepreneurs at different levels of operation thereby making it difficult for them to break even not to talk of profit.

He particularly showed our correspondent a letter supposedly from the Nigerian Customs Service and which gave indication for a fresh tax which entrepreneurs must pay.

The letter on the Nigerian Customs Services letter headed paper dated 8th May 2023, was titled “Re Approval for the implementation of the 2023 fiscal policy measures and tariff amendment, on Alcoholic Beverages and Tobacco, and purports the president as directing the Customs as part of the 2023 fiscal policy measures to expect an upward review of the duties payable on alcoholic beverages and tobacco.

According to the letter, with ref number NCS/LSI/EXC/R.042/VOL.111, “The revised excise duty rate on alcoholic beverages and tobacco is in line with existing excise regime implementation period and shall take effect from 1stJune 2023 and review upward by 1stJune 2024, also the approval of the duty collection on single use plastics (SUP) at the rate of 10% AD-valorem shall take effect from 1stJune 2023”.

It added that affected companies should come to the Nigerian customs service, for further clarification within the next 7 working days, failure of which it said would attract sanctions.

The letter which was signed by IQ Ogbudufsi, customs area controller, Lagos industrial area command, has since been causing concern within business circles.

Asserting that he was not the only that is already confused about the memo, he added:

“What it means is that we must go to the Customs and pay an amount of money whether official or not. You cannot go there and not pay money whether you are making profit or not”.

Another entrepreneur who is active in the beverage sector, and spoke to our correspondent on the sidelines of a business forum in Lagos said that that receiving the notice, that he already knows that the agency would start visiting his factory.

“We usually receive this kind of notice. And when they come, they will start finding faults with your production and your business.

“Customs will come, NAFDAC (National Agency for Food and Drug Administration and Control) will come and even police.

“At the end of the day, you find yourself spending too much money that affects your production”.

He said last year, he had a running battle with the agencies, to the extent that he could not concentrate on his factory, saying that sometimes, it has become difficult to know which memo is actually from the agencies.

Before now, entrepreneurs have had to complain about such taxes as Value Added Tax (VAT), withholding tax, company income tax, stamp duties and capital gains tax amongst others.

Both Manufactures Association of Nigeria (MAN) and the Nigeria Association of Chambers of Commerce, Industry, Mines & Agriculture (NACCIMA) have constantly been calling on the government to improve the operating environment for Nigerian business so that they could thrive, but apparently without much improvement.

Chief (Mrs) Endurance Ichofu, the Chief Executive Officer (CEO) of DDS Global Services, in an interviews with a national daily last February, lamented that government’s harsh policies was making it difficult for businesses to thrive in Nigeria.

“I appeal to the government to provide us with electricity and other infrastructure so that our young people can get something to do. I want to appeal to Nigerians that as the election is coming up they should vote for the right person.

“I also beg the government in power that it has a few months to go, it should try and do something concerning energy before it winds up in May this year.”