Sugar-Sweetened Beverage Tax Threatens Manufacturing, Jobs, Centre Warns

The Centre for the Promotion of Private Enterprise (CPPE) has urged the House of Representatives to reject the proposed Sugar-Sweetened Beverage (SSB) Tax Bill, warning that it could undermine manufacturing, weaken job creation and further strain Nigeria’s investment climate.

The CPPE chief executive officer, Dr Muda Yusuf, who stated this, expressed concern over the Senate’s passage of the bill despite opposition from key stakeholders, including the Manufacturers Association of Nigeria (MAN).

CPPE described the proposed tax as ill-timed, arguing that it comes at a period when manufacturers are already grappling with multiple economic headwinds, including high energy costs, elevated interest rates, foreign exchange volatility, logistics bottlenecks, multiple taxation and weak consumer purchasing power.

According to the organisation, imposing additional excise duties on non-alcoholic beverages would further erode the competitiveness of local industries and discourage investment in the sector.

“The bill seeks to impose an additional layer of taxation on non-alcoholic beverage manufacturers, thereby worsening cost pressures across the value chain,” the statement said.

The group noted that the food and beverage industry remains a critical pillar of Nigeria’s manufacturing base, contributing significantly to industrial output and employment generation, while also maintaining strong linkages with agriculture, packaging, logistics, retail and hospitality sectors.

It warned that further tax pressure on the subsector could raise production costs, push up consumer prices, suppress demand and ultimately put jobs at risk.

“At a time when the economy needs stronger industrial growth, this proposal risks becoming a tax on production, investment and employment,” CPPE stated.

The organisation also argued that the bill runs contrary to the Federal Government’s ongoing fiscal reforms aimed at improving the business environment and attracting investment.

It pointed out that the 2026 fiscal policy framework already includes an excise duty of N10 per litre on non-alcoholic beverages, stressing that additional taxation could create policy inconsistency and increase regulatory uncertainty.

“Investors thrive on predictability. Frequent additions to the tax burden send the wrong signal to both existing and prospective investors,” the group warned.

On the health justification for the tax, CPPE acknowledged concerns over rising cases of diabetes and other non-communicable diseases but maintained that sugar taxation alone would not address the underlying causes.

It identified poor dietary habits, sedentary lifestyles, low health awareness and genetic factors as key drivers of such health conditions, urging policymakers to prioritise preventive healthcare, nutrition education and public awareness campaigns.

The group further called on lawmakers to focus on non-fiscal interventions such as promoting physical activity and strengthening healthcare systems rather than introducing what it described as punitive taxation measures.

CPPE therefore urged the House of Representatives to reject the bill in the interest of manufacturing sustainability, employment preservation and improved investor confidence.

“The economy needs relief, not additional taxation; support for production, not policies that weaken enterprise; and reforms that create jobs, not measures that put them at risk,” the statement added.