The Corporate Accountability and Public Participation Africa (CAPPA) has called on the federal government to increase the Tax on sugar-sweetened beverages (SSB) from ₦10 per liter to ₦130 per liter, or at least 20% of the Retail price. This was mentioned during a journalism training on Sugar-Sweetened Beverage taxes in Lagos, underlining the connection between the consumption of sugar-filled beverages and the rise in non-communicable diseases (NCDs), which account for over 30% of deaths in Nigeria each year. The executive director of CAPPA, Akinbode Oluwafemi, emphasized that Nigeria is the world’s fourth-largest soft drink user, with daily sales of over 38.6 million liters, raising serious health concerns.
Experts like Mr. Fidelis Obaniyi, Research Officer at the Centre for the Study of the Economies of Africa (CSEA), alsk supported higher taxes on sugar-sweetened beverages, citing international instances where such levies had decreased consumption and improved Public Health results. It was estimated that over the course of 20 years, South Africa’s 20% SSB tax would prevent 8,000 lives due to type 2 diabetes. Additionally, it was predicted to lower per capita SSB intake by 30% for males and 9% for females, while reducing obesity by over 3% for males and 2% for females.
Government is mulling on raising the SSB tax.
Obaniyi predicted that the implementation of a similar tariff in Nigeria would result in a 29% decrease in SSB consumption and a 972% rise in excise tax income, with a possible annual return of ₦729 billion. The SSB Tax Project Officer for CAPPA, Ms. Opeyemi Ibitoye, noted that in order to drastically decrease habitual consumption, global health recommendations call for an increase in SSB taxes of at least 20%. Ibitoye implored the government to put corporate profits aside and give priority to public health. She proposed that tax earnings should be allocated to healthcare and illness prevention programs, as well as increased public awareness.
A variety of beverages, including sodas, juices, energy drinks, and other sweetened beverages, are subject to Nigeria’s Sugar-Sweetened Beverages tax. As the advocacy becomes increasingly vocal, the government is reportedly mulling on raising the levy to comply with international suggestions of a 20% tax, which has been proven effective in nations like South Africa. The advocates contend that a higher tax could reduce the consumption of sugar-filled beverages while also raising funds for the prevention of NCDs and upgrades to the healthcare system.
Advocacy for the tax increase has garnered strong support.
Thus far, opinions on how effective the present tax rate is have differed. Proponents contend that the ₦10 per liter tax, which represents less than 5% of the product price, is too little to have a substantial impact on consumption patterns. Whereas, others opined that a higher tax rate would significantly increase funding for public health programs while also reducing sugar consumption. Particularly, the beverage industry has been quite hostile to the government, claiming that an increase in the levy will jeopardize Nigeria’s already vulnerable Economy by increasing consumer prices and creating job losses.
Industry organizations such as the Manufacturers Association of Nigeria (MAN) have been pressuring the government to reevaluate or reduce the tax. Advocacy for the increase of the SSB tax has garnered strong support from public health groups and is regarded as a crucial step in addressing health risks associated with sugary beverages in Nigeria, despite opposition claims from the sector, which includes worries from manufacturers that the tax may result in job losses and economic difficulties. A number of associations and groups are still pushing for higher tax rates and more transparency in the way the money will be utilized for public health initiatives.
Related Article: Impact of potential increase of sugar tax
On the other hand, the government classifies the SSB tax as a component of its larger public health agenda, which also aims to address the prevalence of disorders like obesity and diabetes. Also, the Ministry of Health, the Ministry of Finance has framed the tax as a success for both health and budgetary policy. The government has made it clear that the tax’s proceeds will go toward enhancing the nation’s healthcare system, but Civil Society organizations are nonetheless worried about the lack of openness surrounding the funds’ intended purpose.