The Centre for the Promotion of Private Enterprise has urged the Federal Government to reject calls for additional taxation on sugar-sweetened beverages, warning that such a move would worsen pressure on businesses and threaten jobs.
In a statement on Tuesday, the Director of CPPE, Dr Muda Yusuf, also called on the National Assembly to discontinue any legislative consideration of the proposed tax, describing it as ill-timed and inconsistent with ongoing tax reforms.
“The Centre for the Promotion of Private Enterprise strongly opposes the call for additional taxation on sugar-sweetened beverages as canvassed by the (group known as) Corporate Accountability and Public Participation Africa. The proposal is ill-conceived, poorly timed, and inconsistent with the current administration’s tax reform agenda, which is anchored on reducing the burden of taxation on businesses, improving tax efficiency, and stimulating investment,” Yusuf said.
He argued that imposing new taxes on the manufacturing sector, particularly an energy-intensive segment such as the beverage industry, would be counterproductive at a time when the economy is still recovering.
“At a time when the Nigerian economy is still navigating a fragile recovery, the imposition of new taxes on the manufacturing sector would be profoundly counterproductive and disruptive to growth, employment, and investment,” Yusuf added.
The CPPE noted that businesses are already grappling with severe macroeconomic challenges, including high inflation, elevated interest rates, rising energy costs, and exchange rate pressures, all of which have significantly increased production expenses.
“The Nigerian business environment remains extremely challenging. Inflation has remained elevated, interest rates are at historic highs, and energy costs have surged sharply, making self-generation of power prohibitively expensive amid weak grid electricity supply,” Yusuf said.
He further explained that the sugar-sweetened beverage industry is heavily dependent on energy for production and distribution processes, ranging from water treatment and carbonation to packaging and cold-chain logistics.
The CPPE chief noted that these rising costs have led to higher product prices, declining sales volumes, and mounting pressure on manufacturers, particularly small and medium-scale operators.
“In this context, imposing additional taxes on an already energy-burdened sector would amount to a punitive layering of fiscal pressure on top of an unprecedented cost crisis,” Yusuf noted.
The CPPE warned that the proposed tax could trigger widespread negative consequences across the value chain, including job losses and business closures.
“The food and beverage sector is a critical component of Nigeria’s industrial ecosystem and the largest employer in the manufacturing space. Additional taxation at this time would lead to accelerated downscaling of production, closure of vulnerable manufacturers, job losses, and disruptions to agricultural supply chains,” Yusuf stated.
While acknowledging concerns about rising cases of non-communicable diseases such as diabetes, the CPPE maintained that taxing sugary drinks is not an effective solution.
“Taxation of sugar-sweetened beverages is not a silver bullet for addressing public health challenges. Public health outcomes are influenced by broader lifestyle factors, including dietary habits and physical inactivity,” Yusuf said.
He urged authorities to prioritise public health education, lifestyle changes, and preventive healthcare instead of imposing additional taxes on the sector. The CPPE also warned that introducing new sector-specific taxes would contradict the government’s reform agenda and send negative signals to investors.
“Introducing new sector-specific taxes would contradict the government’s reform philosophy, create policy uncertainty, and undermine confidence in Nigeria’s manufacturing sector,” Yusuf maintained.
He reiterated the organisation’s call for policy consistency and business-friendly reforms to support economic recovery. “At this critical stage of Nigeria’s economic recovery, the policy imperative should be to support businesses, protect jobs, and strengthen growth, not impose additional tax burdens on an already strained sector,” Yusuf added.
