According to research by The ANAEDOONLINE, manufacturers’ taxe payments to the federal government increased by 60% to N839.6 billion in 2022 from N524 billion the year before.
Data from various reports compiled by the National Bureau of Statistics revealed that manufacturing company income tax increased significantly in 2022 to N468.59 from N235 billion in the same period the previous year, while VAT collected from the sector increased to N477.43 billion from N288.4 billion in 2021.
The manufacturing sector’s significant tax rise comes notwithstanding repeated requests by the Manufacturers Association of Nigeria for the government to lower the taxes it is now collecting from those businesses in order to lessen the impact of the economic slump on them.
One major development tax-wise that plagued the productive sector last year was the introduction of an excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages in the country.
The charge was part of a new policy introduced in the Finance Act, which was signed into law by President Muhammadu Buhari on December 31, 2021, alongside the 2022 Appropriation Bill.
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Minister of Finance, Budget and National Planning, Zainab Ahmed, while making the disclosure said that the new sugar tax was introduced to raise excise duties and revenues for health-related and other critical expenditures in line with the 2022 budget priorities.
Consequently, the Manufacturers Association of Nigeria and economic experts had warned that a new tax imposed on carbonated drinks would be counter-productive.
In a report titled “Key considerations against excise on non-alcoholic beverages,” MAN projected that the government might collect N81bn revenue from excise duty on carbonated drinks between 2022 and 2025, but lose N197bn within the same period from other taxes, such as Value Added Tax and Company Income Tax from the manufacturers of soft drinks.
The report added that introducing excise duty would cause the beverage sub-sector of the food and beverage industry to lose up to N1.9tn in sales revenue between 2022 and 2025, having adverse effects on jobs and supply chain businesses.
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