Private Sector Rejects Sugar-sweetened Beverage Tax Increase

The Organised Private Sector (OPS), led by the Manufacturers Association of Nigeria (MAN), has opposed plans to increase excise duties on sugar-sweetened beverages (SSBs), warning that the move could jeopardise more than 1.5 million direct and indirect jobs nationwide.

Speaking in Lagos on behalf of the non-alcoholic drinks sector, MAN director general, Segun Ajayi-Kadir, expressed concern over the provisions of the Customs and Excise Tariff (Consolidation) Act Amendment Bill 2025, which seeks to replace the current excise duty of N10 per litre on SSBs with a percentage-based levy tied to retail prices.

Ajayi-Kadir said while manufacturers support government efforts to improve revenue generation and promote public health, any fiscal policy must be predictable, evidence-based and responsive to prevailing economic realities.

According to him, the proposed tax increase could have far-reaching consequences for an industry that contributes significantly to the economy and provides livelihoods for millions of Nigerians.

“The non-alcoholic beverages sector accounts for about 33 per cent of Nigeria’s manufacturing output and supports over 1.5 million direct and indirect jobs across the agricultural value chain, production, logistics, retail and small businesses,” he said.

He noted that despite operating in a challenging environment marked by rising inflation, foreign exchange volatility and increasing energy costs, companies in the sector have continued to make substantial contributions to government revenue.

Ajayi-Kadir disclosed that the industry’s tax payments rose from N123 billion in 2022 to N127 billion in 2023, adding that beverage manufacturers already remit between 40 and 45 per cent of their gross revenues in various taxes and statutory charges.

He argued that Nigeria’s per capita sugar consumption remains relatively low at approximately 7.1 kilogrammes annually and maintained that there is no conclusive evidence linking sugar-sweetened beverages to the primary cause of non-communicable diseases (NCDs) in the country.

According to him, conditions such as diabetes, obesity and cardiovascular diseases are influenced by a combination of factors, including lifestyle choices, genetics, environmental conditions and broader dietary patterns.

MAN therefore urged the Federal Government to adopt a balanced, coordinated and evidence-driven approach to excise taxation that supports public health objectives without undermining industrial growth, investment and employment.

The association also called on the Federal Government to engage the National Assembly on the proposed legislation and discontinue plans to alter the existing excise regime.

It further urged authorities to preserve the integrity of the 2026–2028 Fiscal Policy Measures framework and ensure consistency, predictability and sustainability in the administration of excise policies.

According to MAN, maintaining a stable tax environment is essential to protecting investments, safeguarding jobs and sustaining the growth of Nigeria’s manufacturing sector.