MAN: Increasing Taxes on Sugar Sweetened Beverage Inimical for Govt Revenue, Businesses

Gilbert Ekugbe

The Manufacturers Association of Nigeria (MAN) has warned that the proposed plan to increase taxes on sugar sweetened beverages would have severe repercussions on the federal government’s revenue, businesses community and consumers in the country.

In a statement signed by the Director General, Segun Ajayi-Kadir, MAN explained that the nation’s previous implementation of a sugar tax in 2021 already had significant repercussions, “as the industry faced an 8 per cent to 10 per cent revenue decline, while the Food and Beverage sub-sector experienced negative Gross Domestic Product (GDP) growth.”

He warned that these distressing indicators foreshadow a bleak future if the proposed tax is enforced, with dire consequences including mass layoffs, factory shutdowns, and an exacerbation of the already rampant unemployment crisis, predicted to hit 41 per cent in 2023

In his words: “The collateral damage of this tax won’t be limited to the manufacturing sector alone. The burden will disproportionately fall on lower-income consumers who rely on SSBs as a staple in their diet due to limited access to fresh produce amidst soaring inflation rates. The proposed tax and the inflation crisis will further erode their purchasing power, leading to higher prices for essential goods and services. The vicious cycle of deprivation and scarcity will only worsen, pushing Nigeria deeper into food shortage nightmares.”

The Organised Private Sector (OPS) also slammed a coalition for misleading the public on impact of sugar on wellbeing and also calling on the federal government to increase the excise tax on sugar-sweetened beverages (SSBs) under the guise of combating diabetes and obesity.

“While we acknowledge the importance of addressing these health concerns, it is important to be wary about the oversimplification of the issue and the misguided demonisation of sugar sweetened beverages,” he said.