The federal government is currently considering a temporary suspension of the N10 tax on Sweetened Sugar Beverages (SSBs) to stabilise the economy.
This was disclosed by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun during a meeting with the members of the National Action on Sugar Reduction (NASR) according to News Agency of Nigeria.
The Minister contended that the tax will be temporarily suspended and then reintroduced after the economy stabilizes.
He emphasized the need for data-driven analysis in drafting public policy by drawing comparisons between the arguments made previously against tobacco taxation and those made against the SSB tax.
While the government does not promote firms that offer unhealthy items, he said, it does understand the need to support enterprises and assist individuals in adjusting to the current cost of living.
In addition, the minister underlined the Presidential Economic Coordination Council’s contribution to this decision, recognizing the need for both government revenue and assistance in the face of economic hardship.
He said, “This measure aims to help beverage companies navigate the current economic difficulties without going under. The temporary suspension of the sugar tax is seen as a measure to stabilise the economy and support the beverage industry during this critical period.
“We support your need for revenue, but we must find a balance. The increase in foreign exchange rates is being passed on to consumers. While the official exchange rate was artificially pegged, products are often priced at the parallel market rate, meaning companies do not pass on the actual exchange rate to customers.”
Speakinbehalf of the National Action on Sugar Reduction (NASR), Comrade Bernard Enyia, who also serves as the vice president of the Diabetes Association of Nigeria, noted that the consumption of sugar-sweetened beverages (SSBs) is linked to various health issues, including obesity and dental problems.
The vice president of the Diabetes Association of Nigeria,
Bernard Enyia speaking on behalf of the National Action on Sugar Reduction (NASR), said
that drinking sugar-sweetened drinks (SSBs) is associated with several health concerns, such as dental troubles and obesity.
Advocacy Lead at Gatefield, Shirley Ewang underlined that the potential cash generated by SSB tariffs is important since it may be used to fund health programs.
She said, “Last year, Nigeria faced significant inflation and currency devaluation, trends that began well before the tax’s introduction. In our fact sheet, we addressed one of the key arguments from the industry about profit margins.
“Interestingly, Coca-Cola’s 2023 profit report revealed that in emerging markets like Nigeria, their profits increased by over 50 per cent. This indicates that despite the tax, their profitability remained strong.”
The federal government has imposed tax on sugar-filled beverages to tackle the rising levels of obesity and other illnesses in the country.
Additionally, this bill will provide much-needed government funding following the COVID-19 pandemic’s financial impact.
