CPPE Issues Warning Over Proposed Additional Tax on Sugar-Sweetened Beverages
The Centre for the Promotion of Private Enterprise (CPPE) has raised significant concerns regarding plans to impose additional taxes on sugar-sweetened beverages (SSBs). In a message to Legit.ng, the Director-General of CPPE, Muda Yusuf, cautioned that such a move could severely harm Nigeria's manufacturing sector and impede the nation's economic recovery efforts.
Economic Timing and Sectoral Pressures
Yusuf emphasized that while the push for higher taxes on sugary drinks may be motivated by public health considerations, the timing is particularly inappropriate given Nigeria's current economic realities. He noted that the beverage industry is already under immense pressure, with manufacturers grappling with difficult macroeconomic conditions. The sector is highly energy-intensive, relying heavily on power for processes such as water extraction, purification, bottling, and distribution. With elevated energy and logistics costs, additional taxes could threaten the sustainability of these businesses.
He stated, "Manufacturers are already grappling with difficult macroeconomic conditions. Adding new taxes at this time could disrupt growth, reduce investment, and lead to job losses." Yusuf highlighted that beverage prices have surged by over 50% in the past two years, leading to declining sales volumes and increased strain on small and medium-scale producers.
Broader Economic Implications
The CPPE underscored the critical importance of the food and beverage industry to Nigeria's economy, describing it as a major employer with an extensive value chain that supports agriculture, manufacturing, and distribution networks. Yusuf warned that further taxation could trigger negative consequences, including reduced production capacity, business closures, and disruptions across supply chains linked to beverage production.
He added, "At this critical stage of Nigeria's economic recovery, the policy priority should be to support businesses, protect jobs, and strengthen growth, not impose additional tax burdens on an already strained sector." This position comes amid calls by groups like Corporate Accountability and Public Participation Africa (CAPPA) for increased taxation on sugary drinks to address public health concerns, as reported by Leadership.
Public Health vs. Economic Stability
While acknowledging the rising cases of non-communicable diseases such as diabetes, Yusuf argued that taxation alone is insufficient to address these health issues. Instead, he called for broader interventions, including public education campaigns, prevention programs, and lifestyle changes. The CPPE urged the federal government to carefully consider the potential impact of the proposed tax, emphasizing the need to balance public health objectives with economic stability.
This warning aligns with Nigeria's ongoing tax reform agenda, which aims to reduce the burden on businesses, improve efficiency, and stimulate investment. Introducing new levies on a struggling sector could undermine these objectives, as noted by Yusuf.
Context of Tax Reforms
In related developments, Legit.ng earlier reported that the federal government has disclosed a range of exemptions and reliefs under new tax reform laws signed by President Bola Tinubu's administration, effective from January 1, 2026. These reforms, outlined by Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, include 50 key exemptions and deductions covering personal income, pensions, small businesses, and essential goods and services. The reforms aim to simplify compliance and reduce the tax burden on lower-income groups, highlighting a broader effort to support economic recovery.
