Stakeholders caution against further taxes on consumer goods
… Manufacturers insist policy may lead to business collapse, job loss … World Bank backs move
THE purpose of the proposed finance bill 2023 fiscal year should not be about mobilis0ing more resources for the government but promoting the health of Nigerians and boosting the manufacturing sector.
This was the view of Industry stakeholders, as they increasingly argued against the proposed increase in taxes on manufactured goods and services.
Speaking at the Finance Bill 2022 stakeholders' session yesterday, the World Bank Group threw its weight behind the proposed law, noting that there is the need to recognise engendering prohealth tax.
The modern role of the exercise is to internalize negative externalities of ' harm goods'.
It emphasised that increased excise taxes, leading to higher prices of commodities that are harmful to human health, is the way to go.
A hospital physician and former Coordinator of the Presidential task force on COVID- 19, Dr Sani Aliyu observed that the planned introduction of a sugar and sweetened beverages tax in Nigeria is a welcome development.
"This is the right thing to do for three basic reasons. The first reason is that globally, we are faced with an epidemic of non- communicable diseases such as diabetes, hypertension, strokes and obesity. All of these are predisposed to cancers," he said.
Aliyu added that about six per cent of Nigerians have Type 2 diabetes, which translates to more than 10 million people.
He hinted that diabetes and strokes are the two topmost causes of disabilities among Nigerians.
He explained: "We also know that seven out of 10 of us will end up dying from one of these two conditions. Unfortunately, diet plays a major role as a driver of noncommunicable diseases. 14 per cent of non- communicable diseases arise directly as a result of our dietary preferences. This law will help reduce consumption and boost the health status of Nigerians."
The industry players argued that over- taxation will further pull down production, stressing that the best option is for the government to stimulate production to achieve maximum tax collections across the board.
On his part, the Managing Director/ Chief Executive Officer of Coca- Cola Nigeria, Alfred Olajide, urged caution in the implementation of the law.
He said as the government explores avenues for additional taxations to boost its revenues, it must take the survival of the food and beverages subsector into consideration and must move away from legislation that could be injurious to the manufacturing sector as a whole.
His words: "It is clear that the government needs revenue but a balance must be achieved so that the industry does not face challenges as from next year. This is within the context of the importance of food and beverages to the economy. From the Gross Domestic Product ( GDP) perspective, the sector represents about five per cent of Nigeria's GDP. It has received about N200 billion in Value Added Tax and another N200 billion in company income tax in the last five years. More importantly, it employs about 1.5 million people in the food chain and more than 15 million people within the downstream impacts and upstream impacts of employment it generates."