Stakeholders: Sugar Tax May Unlock N300bn for Health Investment, Seek Greater Collaboration on Tax Reforms

James Emejo in Abuja

Stakeholders under the aegis of the National Action on Sugar Reduction (NASR) have said the Sugar-Sweetened Beverages (SSB) taxes have the potential to generate over N300 billion for the federal government if raised from the current 10 per cent.

The coalition at the end of a meeting in Abuja, also called for greater multisectoral collaboration in enacting the government’s proposed tax reforms. 

The group comprises health organisations advocating for policy measures to curtail the consumption of SSBs, which are linked to non-communicable diseases (NCDs) like type 2 diabetes, cancer, and hypertension. 

They argued that if increased to a level that raises SSB prices by at least 20 per cent of the final retail price, the tax represented a key source of revenues for the government to implement laudable health projects, and boost its fiscal position among others.

Specifically, the coalition urged the government to increase the SSB tax rate to a level that discourages consumption while generating revenue. 

The group further urged the federal government to introduce a draft SSB tax bill that includes provisions for earmarking tax revenue for healthcare as well as including public health organisations in the fiscal policy reform process.

The requests came against the backdrop of a recent statement by Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, that the government had no plans to introduce new taxes or impose higher tax rates.

Speaking at the meeting, President, Diabetes Association of Nigeria (DAN), Dr. Mohammed Alkali, commended the government’s objective to enhance revenue collection and promote the efficient use of tax revenue. 

He, however, noted that the “SSB tax, which has been introduced in many countries globally, has proven to have both health and economic benefits”. 

On the part of safeguarding the health of Nigerians, he said increasing the cost of commodities is expected to discourage consumption, hence reducing the risk of NCDs and reducing complications.

He said the current N10 per liter SSB tax will “make a deeper health impact if the rate is sufficiently increased to a level that will discourage purchase while generating significant revenue.”

Alkali stressed that revenue from pro-health taxes could be used to cover healthcare expenses for people living with NCD, noting that “tax funds need to be channeled towards NCDs prevention and treatment in the country.”

Also, responding to the Fiscal Reforms Committee’s plans to halt the introduction of new taxes, the coalition asserted that there should be greater public health representation in the institution of tax reforms, especially the sin taxes, which are imposed on commodities that affect health.

In the same vein, a representative of Project PinkBlue, Gloria Okwu, Gloria Okwu said, “It is important for public health voices to have a seat at the table when tax policy reforms are being considered.”

The coalition members stressed that pro-health tax policies have an important bearing on health outcomes, urging the Fiscal Policy and Tax Reforms Committee to work in collaboration with public health organisations in formulating tax policies.

The group pointed out that Nigeria’s burgeoning youth population, which is poised to deliver economic dividends in its contribution to the workforce, could face lowered economic productivity if non-communicable disease rates continued to rise and affect them.

The coalition also expressed fears that the SSB tax, currently enacted through the Finance Act, remained vulnerable to interference and called for a more efficient implementation of the tax through legislation.