…Says bill will worsen cost pressures for manufacturers, weaken sector

CHIEF Executive Officer (CEO), Centre for the Promotion of Private Enterprise, (CPPE), Dr. Muda Yusuf, has expressed shock and deep concerned over the Senate’s decision to proceed with the passage of the Sugar-Sweetened Beverage (SSB)Tax Bill despite overwhelming objections from private sector stakeholders, led by the Manufacturers Association of Nigeria (MAN).

At a time when government policy should focus on easing the cost of doing business and revitalising manufacturing, he noted that this bill seeks to impose an additional layer of taxation on non-alcoholic beverage manufacturers, thereby worsening cost pressures across the value chain.

Adding that the bill is ill-timed, insensitive to prevailing economic realities and inconsistent with the Federal Government’s commitment to reducing the tax burden on businesses, he said now when manufacturers are grappling with elevated energy costs, high interest rates, FX pressures, logistics challenges, weak consumer purchasing power and multiple taxes and levies; the imposition of an additional excise tax on non-alcoholic beverages would further erode industrial competitiveness and weaken investment prospects.

Further noting that the food and beverage industry is one of the strongest pillars of Nigeria’s industrial economy, accounting for a significant proportion of manufacturing output and jobs, he said its extensive linkages with agriculture, packaging, logistics, retail trade, hospitality and distribution make it a powerful engine of inclusive economic activity.

“The non-alcoholic beverages subsector is a major contributor to this ecosystem and should be supported, not burdened with additional taxation.

“Any additional tax burden on the industry would inevitably increase production costs, raise consumer prices, weaken demand, reduce capacity utilisation and threaten jobs across the value chain. At a time when the economy needs stronger industrial growth, this proposal risks becoming a tax on production, investment and employment,” he said.

Pointing out that the proposed legislation also runs contrary to the spirit of the ongoing fiscal and tax reforms designed to create a more investment-friendly business environment; he said the 2026 fiscal policy framework already provides for an excise duty of ₦10 per litre on non-alcoholic beverages.

Further escalation of the tax burden through additional legislation he said, would create policy inconsistency, heighten regulatory uncertainty and undermine investor confidence. “Investors thrive on predictability.

Frequent additions to the tax burden send the wrong signal to both existing and prospective investors,” he decried.
Recognising the importance of addressing the growing incidence of diabetes and other non-communicable diseases in the country, he said available evidence suggests that sugar taxes, on their own, deliver limited public health outcomes.

“The major drivers of diabetes and related health conditions in Nigeria include poor dietary habits, excessive consumption of carbohydrate-rich foods, physical inactivity, sedentary lifestyles, inadequate health awareness and genetic predisposition.

Taxation does little to address these underlying factors. What it achieves is an immediate increase in production costs, higher consumer prices and additional pressure on investment and employment.”

Noting that if the real objective is to improve public health outcomes, he urged lawmakers to prioritise legislations that directly address the root causes of lifestyle-related diseases.
These he said, include nutrition education, public health awareness campaigns, promotion of exercise and physical activity, encouragement of healthier food choices, improved preventive healthcare systems, and urban planning that supports active living through walking and cycling infrastructure.

Such interventions he noted, are more sustainable, inclusive and less damaging to economic activity than punitive taxation targeted at a major manufacturing subsector. Public health goals should not be pursued through policies that inadvertently weaken production, investment and job creation, he said.

Urging the House of Representatives to decline concurrence to the bill, he said the proposed legislation is fundamentally anti-growth, penalises production, discourages investment, threatens jobs and imposes additional costs on already burdened consumers.

“At a time when businesses and households are struggling with unprecedented cost pressures, 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.

“Public health objectives and economic growth are not mutually exclusive. Nigeria can pursue both through policies that promote healthier lifestyles while protecting investment, jobs and industrial development. The Sugar-Sweetened Beverage Tax Bill fails this test and should therefore be rejected in its entirety,” he stressed.