Guinness Nigeria Made Appropriate Remittances to Nigerian Custom Services
13 Oct 2020 | Press release
Yesterday the Revenue Mobilization Allocation and Fiscal Commission (RMFAC) released a statement in which they stated that they recovered and paid into the Federation Account more than N474 million from Guinness Nigeria Plc in unremitted excise duty.
Guinness Nigeria is an organization that prides itself on complete compliance with all governmental laws and regulations. In June 2018, excise taxes on spirits drinks were exorbitantly increased by almost 400% which was liable to affect the operational efficiency and livelihood of our already overburdened local manufacturing sector. There was a collaborative effort among key stakeholders in our industry under the aegis of the Distillers and Blenders Association of Nigeria (DIBAN) and the Manufacturers Association of Nigeria (MAN) aimed at seeking a reduction in the high excise taxes plaguing the beverage sector. As a result, the aforementioned bodies resorted to intensive discussions with the Federal Government with a view to reducing the steep increase in excise taxes.
The underpayment referred to by RMFAC was part of an industry-wide action to protect our sector from collapse as the Industry pushed back on the exorbitant increase in excise rates. As the government deliberated on the tax increase, the industry continued to make payment at the original rates as the then Minister of Finance had already agreed in principle that the excise duty increase would be reviewed. The Senate Committee on Finance also held a hearing on this issue and stated in their report that the excise rate should be reduced. Hence MAN wrote a request that remittances by manufacturers in the Association be made at the old rate until the conclusion of the review by government. While waiting for resolution on this issue, Guinness Nigeria accrued the excise duties at the higher duty rates and therefore the audited income statements in the financial year ended 30 June 2019 reflected this higher charge.
Once the industry action was complete and a consensus reached, all necessary remittances by industry manufacturers commenced as agreed. In January 2020 Guinness Nigeria agreed a payment plan with Nigeria Customs Service (NCS) for the backlog payments and Guinness has since paid all amounts in full to the Nigerian Customs Service in addition to our normal monthly remittances as agreed. For our full year ended June 30, 2020, despite the major disruption to our business brought about by the COVID-19 Pandemic, Guinness Nigeria paid the sum of N7.1 billion as excise tax to Nigerian Custom Service, an increase over our payment of N6.7billion in the previous year ended June 2019.
In August 2020, the Ministry of Finance acceded to the request of the industry and reduced the contentious excise duty rate. We would like to thank the Federal Ministry of Finance for this support to Manufacturers. We would also like to thank RMFAC for a speedy audit process.
As a responsible and reputable corporate citizen, Guinness Nigeria has proven over the years, to be credible and our track record of compliance is a testimonial to this. We are keen on demonstrating the highest standards of integrity in all our dealings with all various stakeholders and are determined to continue to hold these values in high esteem. We will also continue to do our part, as we have done for the past 70 years, to ensure that we contribute to the economic development of Nigeria.