The Centre for the Promotion of Private Enterprise (CPPE) has urged Nigeria’s House of Representatives to turn down a bill seeking a new levy on sugar-sweetened beverages, arguing that the measure would ripple through the economy by raising production costs and potentially weakening jobs and demand.
Key takeaways
- CPPE says the proposed sugar-sweetened beverage tax would increase costs across the production and distribution chain.
- It argues the additional tax on manufacturers would ultimately fall on Nigerians despite difficult economic conditions.
- The think tank contends the move conflicts with the federal government’s stated goal of reducing the tax burden on businesses.
- CPPE warns that higher costs could push up retail prices, weaken demand, reduce capacity use, and put employment at risk.
- It notes the bill had already cleared Nigeria’s Senate earlier, reaching a point where the House can now decide on passage.
CPPE’s case against the bill
In a statement released over the weekend, CPPE Chief Executive Officer Dr Muda Yusuf said the bill—if approved by the Green Chamber—would likely make it more expensive to produce and distribute goods throughout the relevant value chain. He framed the proposal as poorly timed, given Nigeria’s current economic pressures.
Yusuf argued that imposing another layer of taxation on producers, and by extension on consumers, is insensitive to prevailing realities. He said the measure runs counter to efforts aimed at easing the environment for business activity in the country.
CPPE also said the National Assembly’s direction on the issue effectively challenges the President’s position on improving conditions for doing business. The group described the bill as inconsistent with the federal government’s commitment to lowering the overall tax load faced by companies.
Potential economic knock-on effects
CPPE warned that additional fiscal burdens on the non-alcoholic drinks industry would translate into higher production expenses. It said this, in turn, could drive up consumer prices, reduce purchasing power, and weaken demand—factors that would likely lead to lower capacity utilisation.
The think tank added that reduced production and weaker demand could threaten employment not only within manufacturing, but across the broader value chain that depends on the industry’s output. CPPE said that, at a time when Nigeria requires stronger industrial momentum, the proposal risks functioning as a tax on production, investment, and job creation.
Status of the legislation
Separately, the bill’s progress has already reached the stage where the House of Representatives can weigh in. It was reported that the measure, which proposes a N10 duty on non-alcoholic drinks, passed through the Senate last week on Friday.
