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Nigeria Will Review Tax on Alcoholic Drinks, Finance Ministry Says

Nigeria Will Review Tax on Alcoholic Drinks, Finance Ministry Says

(Bloomberg) --

Nigeria is reviewing excise duties on brewery companies operating in the country that were imposed in June last year to boost non-oil revenue.

The main alcoholic-beverage makers in the country -- Anheuser-Busch InBev SA, Heineken BV and Diageo Plc -- have struggled to increase sales in an economy that contracted in 2016 and has faced double-digit inflation. Their difficulties are forcing the government to rethink the taxes, Paul Abechi, a spokesman for Finance Minister Zainab Ahmed, said in emailed response to questions, without giving a time frame.

“Following continued consultation by the government, it has been decided and approved that the excise duties on wines and spirit should be reviewed,” Abechi 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.”

President Muhammadu Buhari’s administration introduced a phased 17 percent increase in duties on alcoholic beverages to boost non-oil earnings amid declining income from the oil industry. Budget and Planning Minister Udo Udoma said revenue was about 55 percent of expected earnings last year.

“The companies don’t need additional tax at a time the economy is coming out of recession and inflation is still high,” David Adonri, chief executive of Lagos-based Highcap Securities said in a telephone interview. “A downward adjustment or abolition of the tax is needed to enable them to remain in business and create jobs.”

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editors responsible for this story: Karl Maier at kmaier2@bloomberg.net, Anthony Osae-Brown, Pauline Bax

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