CPPE Expresses Concern Over Renewed Call for Higher Taxation of Non-alcoholic Beverages

Dike Onwuamaeze

The Centre for the Promotion of Private Enterprise (CPPE) has expressed concern over renewed calls for imposition of additional taxes on sugar-sweetened non-alcoholic beverages in Nigeria.

The CPPE’s concern followed recent release of the World Health Organisation’s “2025 Global Report,” which urged governments to significantly strengthen taxes on Sugar Sweetened Beverages (SSBs).

The Chief Executive Officer of CPPE, Dr. Muda Yusuf, disclosed this in a statement titled, “Sugar Tax: Detrimental to the Nigerian Manufacturing Sector,” released yesterday.

According to him, “Nigeria’s economy remains in a delicate recovery phase and introducing additional sugar-specific taxes at this time risks reversing recent industrial gains, weakening employment outcomes, and undermining the objectives of ongoing manufacturing-friendly fiscal reforms.”

He added that, “public health objectives and economic growth are not mutually exclusive.

“What Nigeria requires is balanced, holistic, and development-conscious policymaking, rather than additional fiscal pressure on one of the most important segments of the manufacturing sector.”

He argued that global best practice does not support sugar taxation as a sustainable or standalone solution to non-communicable diseases—especially in economies characterised by high inflation, weak purchasing power, fragile industrial recovery, and widespread poverty, such as Nigeria,” he said.

Yusuf added that, “manufacturers of non-alcoholic beverages are among the most heavily taxed and cost-pressured businesses in the Nigerian economy.

“Its existing fiscal obligations include 30 per cent Company Income Tax: 7.5 per cent Value-Added Tax (VAT): N10 per litre excise duty; 4.0 per cent National Development Levy on assessable profits; 4.0 per cent FOB levy on imported inputs; import duties of 5.0 to 15 per cent on intermediate raw materials; 0.5 per cent ECOWAS levy; property taxes at sub-national levels and multiple state and local governments’ levies.

“These fiscal pressures are further compounded by Nigeria’s challenging operating environment, including high energy costs, prohibitive logistics expenses, exchange-rate volatility, and elevated interest rates.

“The cumulative effect has been rising production costs, shrinking margins, subdued investment appetite, and higher consumer prices.”

He argued that government should take cognisance of the fact that retail prices of many non-alcoholic beverages have already increased by approximately 50 percent over the past two years, which have eroded their affordability significantly even in the absence of any new tax measures.

Yusuf stated that while public health challenges such as diabetes and cardiovascular diseases undoubtedly warrant urgent attention, “the proposition of a sugar-specific tax is misplaced, economically risky, and weakly supported by empirical evidence.

“More importantly, it is not adequately contextualised within Nigeria’s prevailing structural, social, and macroeconomic realities.”

Yusuf pointed out that available evidence suggested that sugar taxes deliver limited public health benefits unless embedded within broader, long-term lifestyle, behavioural, and structural interventions.

He added: “In Nigeria, the rising incidence of diabetes and related non-communicable diseases are driven primarily by poor overall diet quality, particularly carbohydrate-heavy meals and physical inactivity and sedentary lifestyles”

Others, according to him, are urban design that discourages walking and cycling, genetic and hereditary factors.

He said: “While taxation may marginally influence consumption patterns, it does not address these root causes.

“Conversely, the economic costs of additional taxation—higher consumer prices, reduced demand, job losses, and weakened industrial investment—are immediate, tangible, and potentially severe.”

He also urged the federal government to be wary of fiscal measures that could disrupt the activities of food and beverage sub-sector that is the largest and most dynamic segment of the manufacturing sector, with the non-alcoholic beverages sub-sector playing a particularly significant role.

Yusuf averred that data from the National Bureau of Statistics (NBS) indicated that the food and beverage industry contributes approximately 40 per cent of total manufacturing output, making it a critical driver of industrial growth, employment, and value creation.

He said beyond factory-level operations, the sector sustained an extensive value chain that spanned across farmers, agro-input suppliers, processors, packaging companies, logistics providers, wholesalers, retailers, and the hospitality industry.

“Collectively, these activities support millions of livelihoods nationwide. Any policy that undermines this sector therefore carries wide-ranging economic consequences, including job losses, declining household incomes, reduced investment, and setbacks to poverty-reduction efforts,” he said.

The CPPE, therefore, urged policy makers to prioritise evidence-based, inclusive, and development-friendly alternatives, including lifestyle and nutrition education, community-based health awareness programmes, promotion of physical activity and exercise.

Others are encouragement of fruit and vegetable consumption, healthy food subsidies rather than punitive taxation, urban planning that supports walking, cycling, and active transportation.

“These measures directly address the underlying drivers of diabetes and cardiovascular diseases, deliver broader social benefits, and avoid undermining a critical pillar of Nigeria’s manufacturing and employment base,” he said.