Domestic producers will be impacted by a new carbonated beverage tax, according to LCCI

The Lagos Chamber of Commerce and Industry (LCCI) has spoken out against the federal government's newly imposed excise duty of N10 per litre on all non-alcoholic, carbonated, and sweetened beverages.

The newly imposed excise duty on carbonated drinks, according to the LCCI, would have a knock-on effect on commodity prices and demand, resulting in job losses due to reduced production activities.

The chamber's director-general, Chinyere Almona, stated this in a statement issued on Thursday.

The federal government announced on Wednesday that the 2021 Finance Act would include an excise duty of N10/litre on all non-alcoholic, carbonated, and sweetened beverages.

Carbonated drink prices may rise across the country as a result of the policy.

Following the implementation of a new excise duty on carbonated beverages, the LCCI urged the FG to protect domestic producers from unfair competition.

"The federal government has announced it will charge an excise levy of N10 per litre on all non-alcoholic carbonated sweetened beverages to discourage excessive sugar consumption and increase revenue," Almona said in response to the recent development.

"The immediate concern is the possibility of price increases, which could lead to a decrease in demand and, as a result, job losses due to a reduction in production activities."

"The prohibition on imported drinks should be more strictly enforced in order to protect domestic production from unfair competition in light of Nigeria's high production costs."

The chamber urged the government to use the levy revenue to improve the health-care system.

The LCCI also advocated for an increase in health-sector budget allocation to more than N1 trillion over the next ten years.

"The chamber supports both the government's revenue drive and the pro-health concerns of several stakeholders," the LCCI stated.

"We recommend, however, that the revenue generated by these levies be used to improve the country's woefully inadequate health infrastructure." The N463 billion allocated to the health sector in the federal budget for 2022 should be increased to a trillion naira invested in the sector over the next ten years.

"The chamber is also concerned about the government's position on enforcing revenue targets on government-owned enterprises."

"The operations of these Government-Owned Enterprises should not develop into a hostile business environment in which the private sector will struggle to thrive."

"In addition to levying taxes on carbonated drinks to force consumption reductions, we urge the various public health agencies to regulate the production of sugary drinks to reduce their negative impact on human health."

According to DG, if the government insists on the new "sugar tax," compliance is unavoidable.

"If the President insists on having it, we have no choice but to give it to him," she said.