Brewers push back on Customs tax stamp plan for excise reform

Nigeria’s brewing industry has raised concerns over a proposed tax stamp policy being considered by the Nigeria Customs Service (NCS), warning that it could increase compliance costs in a sector it says is already tightly monitored.

The concerns surfaced on Monday in Abuja during a stakeholder meeting between Customs and the Beer Sectoral Group, where discussions focused on tax administration reforms, trade transparency and proposed changes to excise enforcement.

Adewale Adeniyi, Comptroller-General of Customs said policy design must be anchored on credible data and stronger engagement with industry operators, as the Service deepens fiscal and trade reforms.

“We need to have a clear understanding of what constitutes illicit trade,” he said. “Some of these products are legitimately manufactured in Nigeria.”

He also questioned the reliability of some industry estimates used in policy debates.

“One thing we need to understand more clearly is where some of these estimates came from. When we are making policy decisions of this nature, the credibility and accuracy of data must never be in doubt,” Adeniyi said.

He said Customs had introduced several trade facilitation reforms aimed at improving efficiency across the supply chain, including advance rulings and the Authorised Economic Operator programme.

“We have consistently introduced initiatives aimed at facilitating trade,” he said. “We introduced the Advance Ruling. We introduced the Authorised Economic Operator programme.”

On the proposed tax stamp system, Adeniyi said no final decision had been taken.

“As far as I am concerned, consultations are still ongoing. If this initiative is legitimate and beneficial, then we all have a responsibility to ensure that we are heading in the right direction,” he said.

Earlier, the Beer Sectoral Group, which includes major producers such as Guinness Nigeria Plc and Nigerian Breweries, said the industry already operates under strong compliance and monitoring systems.

Girish Sharma, Chief Executive Officer of Guinness Nigeria Plc, said counterfeiting risks in the sector remain low, questioning the need for additional enforcement layers.

“We fully understand the purpose and importance of tax stamps, particularly in industries where counterfeiting is a major concern,” he said. “However, within the beer sector, counterfeiting is minimal.”

He added that existing systems already provide full visibility across production and distribution.

“From an end-to-end compliance perspective, we believe there is already sufficient transparency and oversight,” Sharma said.

The industry also warned that the policy could have cost implications, given its scale within the economy.

According to PwC Analysis representatives presented, Nigeria’s beer sector enjoyed a six-year boom, with its GDP contribution more than doubling from N1.47 trillion (2.10 percwnt of total GDP) in 2018 to a historic peak of N3.02 trillion (3.93 percent of GDP) in 2023.

However, that growth came to an abrupt halt in 2024, as the sector’s economic footprint contracted sharply to N2.57 trillion.

Industry experts point to a “triple pressure” of skyrocketing interest rates, relentless inflation, and the severe devaluation of the Naira as the primary catalysts behind the decline, highlighting just how deeply systemic macroeconomic instability is squeezing local production.

The tax stamp proposal, typically used in excise industries such as alcohol and tobacco, is designed to link production and distribution data to tax collection in real time. However, operators say its value must be weighed against existing monitoring systems already in place.

Consultations between both sides are ongoing, with Customs insisting the reform is aimed at improving revenue assurance, while industry players push for a more calibrated approach that avoids additional regulatory burden.