FG considering temporary suspension of sugar-sweetened beverage tax – Wale Edun

Minister of finance and coordinating minister of the economy, Wale Edun, has said the federal government is considering a temporary suspension of the sugar tax.

Edun spoke on Wednesday when the National Action on Sugar Reduction (NASR), a coalition of non-governmental organisations, visited him in Abuja.

On January 5, 2022, the federal government introduced an excise duty of N10/litre on all non-alcoholic, carbonated, and sweetened beverages.

The tax was introduced to discourage excessive consumption of sugar beverages which contributes to diabetes, obesity and other health issues.

Speaking at the meeting, Edun said the potential temporary suspension of the sugar tax is under a six-month economic stabilisation plan.

“This measure aims to help beverage companies navigate the current economic difficulties without going under,” he said.

Edun said there are plans to reintroduce the tax once the economy stabilises, stressing that intervention aims to support the beverage industry “during this critical period”.

The minister said the implementation of the sugar tax would improve public health and generate additional revenue for the government.

He agreed to the need for the presence of the tax, highlighting the dual pressures on beverage companies regarding job creation and poverty reduction, and the negative health consequences of their products.

Edun said while job creation by these companies was a positive outcome, the consumption of SSBs carries significant public health costs.

The minister said the government’s tax revenue from SSBs must be balanced against industry needs, including pricing and the cost of living.

He likened the arguments against the SSB tax to those made in the past against tobacco taxation, underscoring the importance of data-driven analysis in shaping public policy.

Edun said while the government is not in favour of companies selling unhealthy products, it recognises the need to support businesses and help people cope with the current cost of living.

“We support your need for revenue, but we must find a balance,” he said.

“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.”

Edun also encouraged the coalition and advocacy groups to continue providing incisive studies and robust data to strengthen the case for the sugar tax.

Speaking on behalf of the coalition, Bernard Enyia, co-chair of the NASR coalition, said the costs of insulin and diabetes care had doubled in the country.

Enyia, who is also the vice-president of the Diabetes Association of Nigeria, said the consumption of SSBs is linked to various health issues, including obesity and dental problems.

He said public health costs associated with these conditions are significant, impacting healthcare systems and reducing overall productivity.