CPPE Firmly Opposes Proposed Additional Tax on Sugar-Sweetened Beverages
Dr Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), has strongly rejected calls for imposing an additional tax on sugar-sweetened beverages (SSBs) in Nigeria. This proposal, advocated by the Corporate Accountability and Public Participation Africa (CAPPA), has been criticized as ill-conceived and poorly timed, clashing with the current administration's tax reform agenda focused on reducing business burdens and stimulating investments.
Economic Fragility and Manufacturing Strain
Dr Yusuf emphasized that the Nigerian economy is still navigating a fragile recovery phase. Imposing new taxes on the manufacturing sector, particularly the highly energy-intensive SSB industry, would be profoundly counterproductive. Such a move could disrupt growth, employment, and investment at a critical juncture. Businesses are already grappling with severe cost pressures in an extremely challenging environment, with inflation eroding consumer purchasing power significantly.
The SSB industry relies heavily on energy at multiple production stages, and the soaring costs of energy bills and distribution have worsened the operating conditions for beverage manufacturers. This further weakens any justification for additional taxation on the sector. Over the last two years, beverage prices and other consumer goods have surged by over 50%, leading to declining sales volumes due to weakened consumer demand. Many operators, especially small and medium-scale producers, are under existential pressure.
Impact on Industry and Public Health Concerns
Dr Yusuf warned that imposing extra taxes on this already burdened sector would amount to a punitive layering of fiscal pressure atop an unprecedented cost crisis, further weakening fragile business fundamentals. The food and beverage sector is a critical component of Nigeria's industrial ecosystem, serving as the largest employer in manufacturing and supporting an extensive value chain spanning agriculture, raw material supply, processing, logistics, distribution, retail, and hospitality.
While acknowledging the rising incidence of non-communicable diseases like diabetes, Dr Yusuf argued that taxing SSBs is not a silver bullet for addressing these health concerns. He urged the government to reject the proposal and called on the National Assembly to discontinue any legislative consideration of such a tax. Public health authorities should instead prioritize education, prevention, and lifestyle interventions.
At this critical stage of Nigeria's economic recovery, the policy imperative should be to support businesses, protect jobs, and strengthen growth, rather than imposing additional tax burdens on an already strained sector.
