FG set to reduce tax on alcohol as companies struggle to survive

The federal government says it is carrying out a review of the excise duties imposed on wines and spirits.

This review is coming nine months after President Muhammadu Buhari 17 per cent tax increase on alcohol and tobacco products.

Kemi Adeosun, the former minister of finance, had argued that the review will increase government’s revenue and discourage the consumption of the items because of the associated health risks.

Adeosun had said the excise duty rates would be spread over a three- year period from 2018 to 2020 to moderate the impact on prices.

Reports say that the main alcoholic beverage makers in the country  Anheuser-Busch InBev SA, Heineken BV and Diageo Plc  have struggled to increase sales making the government to rethink the taxes.

“Following continued consultation by the government, it has been decided and approved that the excise duties on wines and spirit should be reviewed,” Paul Abechi, a spokesman for Zainab Ahmed, the minister of finance, said.

“The process has been set in motion through the relevant departments and inter-ministerial committees and it will soon resolve the matter in a mutually benefiting way.”

Nigerian Breweries Plc, Heineken’s local unit, recently reported that its net income dropped by 41% in 2018 due to “increased excise duty rates and a challenging operating environment”.