Lagos, Nigeria (VOICE OF NAIJA)- The Manufacturers Association of Nigeria (MAN) has urged the Federal Government, through the Ministry of Finance, to withdraw the proposed Customs and Excise Tariff Amendment (CETA) Bill 2025.
They warned that the measure could create conflicting tax regimes and undermine industrial growth, investment, and job creation.
The association expressed concern over provisions in the bill that seek to replace the current specific excise duty of N10 per litre on Sugar-Sweetened Beverages (SSBs) with a percentage-based levy tied to retail prices.
Speaking on behalf of operators in the Non-Alcoholic Drinks (NAD) sector, MAN called for a coordinated, evidence-based and predictable excise tax framework that balances government revenue objectives with industrial development priorities.
Director-General of MAN, Segun Ajayi-Kadir, said while the sector supports government efforts to boost revenue and improve public health outcomes, fiscal policies must be designed to avoid unintended economic consequences.
He warned that the proposed amendment could weaken the recently introduced Fiscal Policy Measures (FPM) 2026–2028 framework, which was established to provide policy stability and predictability for businesses and investors.
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According to him, the introduction of a parallel excise mechanism could create inconsistencies in Nigeria’s fiscal environment, erode investor confidence, distort business planning and diminish the effectiveness of key industrial initiatives such as the Nigeria First Policy and the Nigeria Sugar Master Plan (NSMP II).
Ajayi-Kadir also argued that combining a per-litre excise charge with a retail price-based levy would introduce legal and administrative challenges. He noted that Nigeria’s excise system is currently based on ex-factory or ex-warehouse pricing, making a shift to retail-based valuation difficult to administer and enforce.
He further pointed out that manufacturers already face multiple layers of taxation, including Value Added Tax (VAT), Company Income Tax (CIT), import duties, excise duties and other regulatory charges, pushing effective tax burdens above 40 per cent for some businesses.
“The cumulative tax burden disproportionately affects manufacturers, especially small and medium-sized enterprises, and could further weaken the sector’s competitiveness,” he said.
Ajayi-Kadir described the non-alcoholic drinks industry as one of the strongest segments of Nigeria’s manufacturing sector, accounting for about 33 per cent of total manufacturing output and supporting more than 1.5 million direct and indirect jobs across production, agriculture, logistics, retail and other related activities.
Despite challenges such as inflation, foreign exchange constraints and rising energy costs, he said the sector continues to make substantial contributions to government revenue. Tax remittances by operators in the sector rose from N123 billion in 2022 to N127 billion in 2023.
He added that industry operators currently remit between 40 and 45 per cent of their gross revenues in taxes, placing the sector close to the limit of sustainable taxation. In some cases, companies have reportedly paid taxes from capital rather than profits due to persistent operating losses.
Citing a 2023 PwC analysis, Ajayi-Kadir said a further 10–20 per cent increase in excise duties could reduce the sector’s gross value added from N14.3 trillion to N11.5 trillion by 2030 and lower employment from about 1.5 million jobs to 1.2 million or less.
MAN, also warned that higher excise duties would have ripple effects throughout the value chain, impacting manufacturers, distributors, sugarcane farmers, transporters, retailers and consumers.
According to the association, increased taxes could weaken demand, reduce production volumes, raise unit production costs and lower factory utilisation rates. These effects could ultimately reduce agricultural offtake, slow logistics activities and shrink sales among small retailers and informal traders.
The association further cautioned that rising beverage prices could reduce affordability for consumers, particularly low-income households, and encourage a shift toward unregulated alternatives with potential public health implications.
On health concerns, MAN acknowledged the government’s commitment to tackling non-communicable diseases (NCDs) but maintained that policy decisions should be guided by local evidence.
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The association argued that Nigeria’s annual per capita sugar consumption remains relatively low at about 7.1 kilograms, within the limits recommended by the World Health Organization (WHO), and that beverages account for only a small portion of overall sugar intake.
MAN, also contended that there is no conclusive evidence identifying sugar-sweetened beverages as the primary driver of non-communicable diseases in Nigeria, noting that such illnesses are influenced by multiple factors, including genetics, lifestyle and broader dietary habits.
The association further stated that major global health frameworks, including WHO “Best Buys” and “Quick Buys”, do not rank SSB taxation among the most cost-effective interventions for reducing non-communicable diseases.
Consequently, MAN called on the Federal Government to engage the National Assembly and halt the proposed CETA Bill in order to avoid overlapping excise frameworks and preserve fiscal coherence.
The association also urged government to protect the integrity of the Fiscal Policy Measures 2026–2028 framework, strengthen coordination of excise policy implementation and convene structured consultations with stakeholders to develop a balanced tax regime grounded in economic realities and reliable data.
Ajayi-Kadir reaffirmed the association’s commitment to supporting Nigeria’s economic transformation agenda but stressed that sustainable progress requires coherent, evidence-based policies that promote both public health and economic growth.
“A balanced excise framework will ensure that Nigeria does not have to choose between public health and economic stability. Both objectives can be achieved through collaboration, data-driven policymaking and long-term planning,” he said.
