…Lauds FG On Tax Reforms
The Centre for the Promotion of Private Enterprise (CPPE), a leading private sector advocacy group in Nigeria, has strongly opposed the call for additional taxation on sugar-sweetened beverages (SSB) as canvassed by the Corporate Accountability and Public Participation Africa (CAPPA).
In a Brief Note issued by the Centre’s Director/Chief Executive Officer, Dr. Muda Yusuf, to counter the position of the CAPPA, the group maintained that the proposal of the organization was ill-conceived, poorly timed, and inconsistent with the present administration’s tax reform agenda, which is anchored on reducing the burden of taxation on businesses, improving tax efficiency, and stimulating investment.
It maintained that at a time when the Nigerian economy is still navigating a fragile recovery, the imposition of new taxes on the manufacturing sector, particularly a highly energy-intensive segment such as the sugar-sweetened beverage industry, would be profoundly counterproductive and disruptive to growth, employment, and investment.
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Justifying its stance on the undesirability of new taxes on SSB, the CPPE pointed out that businesses in the country were facing severe cost pressures and that the Nigerian business environment remained extremely challenging.
According to the group, key macroeconomic indicators, including inflation that has remained elevated, significantly eroding consumer purchasing power, high interest rates, surging energy costs, and the Exchange rate depreciation at the onset of the reforms which significantly increased the cost of imported inputs and raw materials, underscored the vulnerability of businesses in the country
The CPPE argued that within this context, the manufacturing sector, including the food and beverage industry, had come under intense strain, being one of the most energy-dependent sub-sectors in manufacturing.
Specifically, it clarified that the SSB industry relied heavily on energy at multiple stages of production, including, water extraction, purification, and treatment; heating, pasteurization, and carbonation processes; high-speed bottling, canning, and packaging lines; and refrigeration and cold-chain logistics across distribution networks
The group stated that the combined burden of soaring energy bills and extremely high distribution costs had significantly worsened the operating environment for beverage manufacturers, further weakening the justification for any additional tax on the sector.
It added that evidence already showed that prices of beverages and other consumer goods have increased by over 50% in the last two years, sales volumes have declined due to weakened consumer purchasing power, and many operators, especially small and medium-scale beverage producers, are under existential pressure
The CPPE stated: “In this context, imposing additional taxes on an already energy-burdened sector would amount to a punitive layering of fiscal pressure on top of an unprecedented cost crisis, further weakening already fragile business fundamentals.
Describing the CAPPA and similar calls for additional taxes on SSB as misplaced policy response to public health challenges, the acknowledging the rising incidence of non-communicable diseases such as diabetes, the group stated that taxation of sugar-sweetened beverages remained not a silver bullet for addressing these concerns.
Noting that public health outcomes are primarily influenced by broader lifestyle factors, including dietary habits across multiple food categories, physical inactivity, and overall consumption patterns, the OPS advocacy group maintained that “singling out a highly energy-stressed industrial segment for punitive taxation is therefore neither equitable nor effective.
“Global evidence on sugar taxes shows mixed outcomes, with limited long-term impact on health indicators in many jurisdictions, particularly where complementary lifestyle interventions are weak”, it added.
The CPPE argued that a more sustainable approach should focus on public health education and awareness campaigns, promotion of healthy lifestyles and physical activity, improved access to preventive healthcare services, and constructive stakeholder collaboration with industry players
It recalled that the current administration had rightly earned commendation for its commitment to tax reform, particularly its focus on reducing multiplicity of taxes, improving tax administration efficiency and creating a more investment-friendly fiscal environment
The group pointed out that introducing new sector-specific taxes, especially on a sector already severely impacted by energy cost shocks, would contradict the government’s reform philosophy, create policy uncertainty, send negative signals to investors, and undermine confidence in Nigeria’s manufacturing sector
Arguing that policy credibility and consistency are critical for sustaining investment inflows and economic recovery, the CPPE described the proposal for additional taxation on sugar-sweetened beverages as misaligned with Nigeria’s current economic realities, inconsistent with ongoing tax reforms, and particularly unjustifiable given the extraordinary energy cost pressures confronting the industry.
On the options open to government on the SSB, the Centre strongly advised the fiscal authorities to reject the proposal for additional taxes on the products, the National Assembly to discontinue any legislative consideration of such a tax, public health authorities to prioritize education, prevention, and lifestyle interventions
On a final note, the CPPE advocated: “At this critical stage of Nigeria’s economic recovery, the policy imperative should be to support businesses, protect jobs, and strengthen growth—not impose additional tax burdens on an already strained sector.”
