Nigeria’s Organised Non-public Sector (OPSN) has referred to as on the federal authorities to withdraw the proposed modification to the Customs, Excise and Tariff Invoice, warning that it might undermine President Bola Tinubu’s fiscal reform agenda and additional fragment the nation’s tax system.
The OPSN, which incorporates main {groups} such because the Producers Affiliation of Nigeria, the Nationwide Affiliation of Small and Medium Enterprises, and the Nigerian Affiliation of Chambers of Commerce, Business, Mines and Agriculture, urged the Nationwide Meeting to keep up present excise charges on non-alcoholic drinks.
In its submission throughout Thursday’s public listening to, the OPSN argued that the modification comprises vital authorized, mathematical, and administrative inconsistencies. It said that whereas the non-alcoholic drinks sector contributes to authorities income and public well being targets, any tax coverage should be holistic, context-appropriate, and harmonised with nationwide industrial priorities to keep away from unintended {economic} penalties.
The group warned that Nigeria’s excise framework was more and more fragmented, with new levies launched with out coordinated analysis of their results on manufacturing, funding, backward integration, employment, exports, and inflation.
In accordance with the OPSN, a pointy enhance in excise duties or the introduction of a brand new levy may drive up working prices, cut back capability utilisation, and enhance retail costs at a time when households and small companies are already beneath {financial} strain.
Such measures, it stated, may even cut back Worth Added Tax and Firm Revenue Tax collections, inserting additional pressure on Federation Account revenues.
Highlighting the importance of the non-alcoholic drinks sector, the OPSN famous that it helps 1.5 million jobs, drives backward integration beneath the Nigeria Sugar Grasp Plan II, and contributes 40 to 45 per cent of gross tax revenues.
The sector, it added, already operates beneath skinny margins and extreme macroeconomic strain. The proposed levy, the group warned, may weaken the beverage worth chain, considered one of Nigeria’s largest contributors to non-oil income, and battle instantly with the federal government’s industrialisation and ease-of-doing-business aims.
The OPSN additionally criticised the Nationwide Meeting for advancing the invoice with out correct coordination with key fiscal establishments, together with the Ministry of Finance, the Presidential Fiscal Coverage and Tax Reform Committee, and the Federation Account Allocation Committee.
The group emphasised that predictable, easy, and non-disruptive tax insurance policies are important for {economic} stability and investor confidence.
Citing proof from international and home experiences, the OPSN highlighted that steep or ambiguous Sugar-Sweetened Beverage (SSB) taxes in low-income economies typically result in job losses, contraction of MSMEs, income decline, development in casual markets, and elevated inequality, with out clear public well being advantages.
The group confused that the present proposal, which suggests a 20 per cent levy per litre of retail worth, comprises inner contradictions that make constant implementation unattainable.
Whereas the OPSN stays open to dialogue with lawmakers, fiscal authorities, and civil society to refine the excise regime, it urged that any future modifications prioritise funding, employment, and long-term income stability.
The controversy over SSB taxation has gained traction amongst advocacy {groups} like Company Accountability and Public Participation Africa (CAPPA), which have proposed a dramatic hike within the SSB tax, from N10 to N130 per litre, as a public well being measure to fight non communicable illnesses.
CAPPA maintains {that a} 1,200 per cent enhance may cut back sugar consumption and related well being dangers, although the OPSN warns that such steep taxes could destabilise the formal enterprise sector.
The conflict highlights the stress between public well being aims and {economic} stability, with Nigeria’s MSMEs positioned on the centre of the controversy.
