The visit led by the Federal Ministry of Health and Social Welfare (FMOHSW) was necessitated given that the FIRS, specifically its Tax Policy and Advisory department, is also a member of the Committee and actively provides insights into the framework and guidelines for implementing the SSB tax in Nigeria.
At the FIRS office, the Committee was received by Mr. M. Murkhar on behalf of Ms. Mobalaji Akintola, Director of the Corporate Services Group. The Group oversees key departments at the FIRS, such as legal advisory, revenue accounting, collection, reporting, research, and statistics, all of which are vital channels that guide the effective and transparent administration of the SSB tax.
As the meeting proceeded, Dr. Dorothy Amadi, Deputy Director of the Non-Communicable Diseases Division at the FMoHSW, discussed the direct link between the consumption of SSBs and the increasing prevalence of non-communicable diseases (NCDs) in the country. She also spoke about the need to ramp up the current tax rate on SSBs to discourage their consumption and thus improve public health.
Nigeria’s tax on SSBs was introduced in 2021 with the enactment of a finance law that stipulated an excise tax of N10 on each litre of non-alcoholic, carbonated and sugar-sweetened beverages. The need for the SSB tax is based on the fact that they offer no nutritional value to the human body but rather increase the global disease burden.
Further insights provided by Austin Iraoya, a Research Expert at the International Food Policy Research Institute (IFPRI), affirmed the urgent importance of an upward adjustment of the tax in line with current economic realities and inflationary pressures in order to cause a notable increase in the price of SSBs. Referencing a simulation study conducted by the Center for the Study of the Economies of Africa in collaboration with CAPPA, he noted that the research identified an optimal tax rate of N130 per litre as an adjustment likely to cause an effective change in demand for and consumption of SSBs.
The World Health Organisation (WHO) also recommends that the SSB tax be implemented in such a way as to cause at least a 20% increase in the final retail price of products containing SSBs to lessen demand.
Acknowledging the FIRS for its tireless interventions in supporting the Ad-hoc Committee’s goals, Abayomi Sarunmi, Senior Programme Manager at CAPPA, proposed a technical session to update key FIRS staff on the latest trends in the SSB tax legislation. He also noted that the revenue from the pro-health SSB tax will be earmarked for public health initiatives.
Responding to the issues, the FIRS thanked the Committee for its consistent engagement with stakeholders and promised to inform its management of the progress made by the Committee in discharging its responsibilities. The Service also welcomed the idea of a technical session and promised to escalate the SSB tax conversation to the Presidential Committee on Tax Reforms as part of broader efforts to harmonise tax administration in Nigeria.
