FG Considers Temporary Suspension Of Sugar Tax On Beverages

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, stated that the federal government is considering a temporary suspension of the sugar tax.

Edun made this announcement on Wednesday during a visit from the National Action on Sugar Reduction (NASR), a coalition of non-governmental organizations, in Abuja.

On January 5, 2022, the federal government introduced a tax of N10/litre on all non-alcoholic, carbonated, and sweetened beverages. This tax aimed to reduce excessive sugar consumption, which is linked to diabetes, obesity, and other health problems.

Edun mentioned that the potential suspension of the sugar tax is part of a six-month economic stabilization plan. “This measure aims to help beverage companies navigate the current economic difficulties without going under,” he said.

He also mentioned that the tax would be reintroduced once the economy stabilizes, emphasizing that the goal is to support the beverage industry “during this critical period.”

The minister noted that implementing the sugar tax would benefit public health and generate additional revenue for the government. He acknowledged the need for the tax, balancing the positive job creation and poverty reduction aspects of beverage companies with the negative health impacts of their products.

Edun highlighted the significant public health costs associated with the consumption of sugar-sweetened beverages (SSBs). He said the government’s tax revenue from SSBs must be balanced with the industry’s needs, including pricing and the cost of living.

He compared the arguments against the SSB tax to those previously made against tobacco taxation, emphasizing the importance of data-driven policy decisions.

Edun stated that while the government does not support the sale of unhealthy products, it recognizes the need to help businesses and people cope with the current cost of living. “We support your need for revenue, but we must find a balance,” he said.

He also mentioned that the rise 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 encouraged the coalition and advocacy groups to continue providing comprehensive studies and robust data to support the case for the sugar tax.

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

Enyia, also the vice-president of the Diabetes Association of Nigeria, stated that the consumption of SSBs is linked to various health issues, including obesity and dental problems. He pointed out that the public health costs associated with these conditions are significant, impacting healthcare systems and reducing overall productivity.

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