Sugar tax: Private sector stakeholders rally support for food, beverage industry

Stakeholders in the food and beverage industry have urged the Federal Government to disregard any campaign aimed at increasing current Sugar-Sweetened (SSB) tax from N10 per litre to N30 per litre.

Mr Segun Ajayi-Kadir, the Director-General, Manufacturers Association of Nigeria (MAN), via a statement on Wednesday in Lagos, said any move to increase sugar tax would strain the already overwhelmed manufacturing sector.

Ajayi-Kadir noted that the current campaign led by the Corporate Accountability and Public Participation (CAPPA) Group was not in support of manufacturing growth, a critical engine of any country’s economy.

According to him, the manufacturing sector; particularly the food and beverage sub-sector remains crucial to every economy of the world and the realities in Nigeria shows its performance has grown in relevance and value.

He noted that over the years, many multinational companies had been forced to relocate their operations out of the country due to harsh and non-conducive operational environment that impeded ease of doing business.

Ajayi-Kadir said the fear being raised by industry watchers was that Nigeria may once more witnessed mass exodus of beverage industries for the nation’s business landscape if the Federal Government increase the SSB Tax.

This, he said, was because excessive taxation would lead to reduced economic activity in the industry, with the ultimate effect of causing a decline in its contribution to the nation’s Gross Domestic Product (GDP).

“Data from the World Trade Organisation shows that the food and beverage sector is estimated to contribute 22.5 per cent of the manufacturing industry value, generating an estimated 1.5 million jobs and 4.6 per cent of the country’s GDP.

“The food and beverage sector encompasses a wide range of businesses, including restaurants, cafes, food producers, and beverage manufacturers.

“Beyond its economic value, this industry forms the very fabric of our daily lives, shaping our culture and social interactions.

“Hence, the recent call for increase in Sugar Sweetened Beverage Tax from N10 per litre to N30 per litre poses a potential threat to the operations of this most important sector of the Nigerian economy,” he said.

The director-general averred that a balanced approach to taxation, taking into consideration the unique challenges of this sector, was essential to ensure its continued growth and contribution to the nation’s GDP.

He noted that striking the right balance between tax revenue generation and economic sustainability would be pivotal in preserving this vital economic pillar while fostering growth and innovation in the industry.

Ajayi-Kadir said the recent call for SSB Tax increase by CAPPA, hinging its argument on the claim that the consumption of sugary drinks as a known risk factor for ailments was deflated by health experts.

“Hence, the theory that increasing levies on sugar-sweetened beverages as the way out in mitigating communicable diseases like obesity and diabetes was unfounded.

“According to health experts, a balanced nutritional approach, which allows for the occasional indulgence in sugary beverages, can harmonise with a healthy lifestyle and dispel misconceptions about their influence on obesity and related health issues.

“Expert also stated that the surge in obesity cannot be solely ascribed to sugar; inactive lifestyles, lack of physical activity, and overall poor dietary choices play a significant role in the obesity epidemic.

“This recent call has become worrisome in view of the fact that the industry has in recent time been burdened with excessive taxes and continuous imposition of taxes has its implications that may likely affect the country negatively,” he said.

Source: News Agency of Nigeria