Nigeria’s excessive taxation driving factories to slash output, lay off workers
By Jeph Ajobaju, Chief Copy Editor
Food and beverage producers plan relocating their factories from Nigeria to neighbouring countries over what they called the burden of “outrageous excise duty” on carbonated drinks and multiple taxation imposed on them by Abuja.
They warned relocating to countries where cost is less is the only option they have to survive but finished products will be brought back to Nigeria, being the largest market on the continent.
The National Union of Food Beverage and Tobacco Employees (NUFBTE) disclosed the plan of the employers in letters written to House of Representatives Speaker Femi Gbajabiamila; Labour and Employment Minister Chris Ngige; Nigeria Labour Congress (NLC) President Ayuba Wabba.
NUFBTE President Lateef Oyelekan argued in the letters the introduction of excise duty has crippled the food and beverage business since January and urged the federal government to save it from extinction.
He said the 10 per cent excise duty on carbonated drinks and excessive taxation have led to the sack of over 5,000 employees in the past eight months, all of which could be verified from Customs officers deployed to the factories.
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Impact of discarding expired products
“The life span of finished products (FCMG) is six months. Over billions of products have expired and will be discarded because of the price increase of the finished products,” Oyeleke said in the letters, per reporting by The Guardian.
“Billions of naira raw materials of the products will be expiring in December and January. The production of goods daily that was formerly 12 hours per day, six days a week (Monday to Saturday) has now reduced to eight hours per day and three times a week.
“Companies that have six production lines have shut three lines down and most companies are now left with three lines to produce due to the excess percentage on excise duty and taxation. Companies are struggling to produce.
“Having said that, in the past years companies like Nigeria Bottling Company, Nigeria Breweries Limited, Nestle, Seven Up Bottling Company, International Breweries, Nigeria Flour Mills, to mention a few, engaged technical school [certificate] holders, GCE holders, OND holders, HND holders and trained them in the company’s technical training college for a year, after which they were employed.
“This is not the case again in recent times.
“Furthermore, each of the aforementioned companies employed close to 1,000 workers in past years, but sadly this exercise has stopped in the past two years due to the outrageous excise duty and taxation affecting the sector.”
