The Manufacturers Association of Nigeria (MAN) and the Nigeria Employers Consultative Association (NECA) have commended the Federal Government for its move to temporarily suspend the N10 per litre sugar tax on carbonated sweetened non-alcoholic beverages, calling for a permanent suspension of the tax “because nearly all manufacturers in the non-alcoholic sector recorded losses in 2023.”
The Minister of Finance and the Coordinating Minister for Economy, Mr. Wale Edun, had recently disclosed that the federal government was considering a temporary suspension of the sugar tax for six months as part of the implementation of its Economic Stabilisation Plan (ESP).
“This measure aims to help beverage companies navigate the current economic difficulties without going under. We support your need for revenue, but we must find a balance. The increase in foreign exchange rates is being passed on to consumers. While the official exchange rate was artificially pegged, products are often priced at the parallel market rate, meaning companies do not pass on the actual exchange rate to customers,” Edun had said.
Welcoming the proposed suspension, Director-General of NECA, Mr. Adewale-Smatt Oyerinde, commended the federal government for the move, urging the government, however, “to withdraw the tax permanently rather than just a suspension for a mere six months.”
“Almost all soft sweetened beverages (SSBs) companies made a loss in the 2023 accounting period, including those that have always made profit,” Oyerinde lamented, even as his counterpart in MAN, Mr. Segun Ajayi-Kadir, described the proposed suspension of the sugar tax as a welcome development for the affected industrial sector, noting that “the initial proposal threatened to exacerbate the already burdensome tax landscape for manufacturers, who are struggling under a multitude of levies.”
“These financial constraints stifle growth, limit investment, and ultimately hinder the expansion of domestic manufacturing, a crucial driver of national development,“ he stressed, emphasizing that the Manufacturers Association of Nigeria (MAN) “applauds this potential shift in policy. We advocate a more comprehensive approach that prioritizes a reduction and harmonisation of existing taxes.”
