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Thursday, February 2, 2023

Setting the records straight on sugar-sweetened beverages tax

There’s been a lot of media reports in recent times about the Sugar-Sweetened Beverages tax (SSB Tax) which was introduced in the 2021 Financial Act. The Act, which was introduced in December 2021, came into force in June 2022 and has generated furore in certain quarters ever since, the latest coming from carbonated drinks producers.

Sugar-sweetened beverages
Sugar-sweetened beverages

According to the Financial Act 2021, carbonated drinks, referred to as SSBs, now carry a N10 per litre tax. This move, which is ultimately for the well-being of Nigerians, has been viciously attacked by the producers of sugary drinks, their agents, and their front groups. The crux of their attack is that “the government of Nigeria is trying to overtax the people for revenue generation”.

This argument is flying on a well-oiled industry-promoted lie aimed at creating a veil on people’s faces rather than project the fact that the government is out to protect the citizenry from consumption of sugary drinks with no nutritional benefits yet, weighty health impacts.

The International Diabetic Federation (IDF) said that the total diabetes related health expenditure in Nigeria grossed N745 billion in 2021, a staggering cost for a nation where many live below the poverty line. The cost of managing health complications of diabetes is not unconnected to the fact that Nigeria now ranks fourth on the global list of countries consuming sugary drinks.

From all angles in the ongoing discourse, Nigeria is at the precipice of a health crisis – both in financial terms and human capacity.

In Nigeria today, more than 77% of the population pay out-of-pocket for health expenditure. This is a model that is regarded as one which is not sustainable and only capable of deepening poverty in a society where poverty is already endemic.

Data available through IDF, WellaHealth, and other health bodies confirm that more than 11 million Nigerians currently live with diabetes with 70% not aware of their medical condition.

Medical conditions like diabetes, obesity, and other complications associated with unchecked consumption of sugary drinks are in the category of the largest killer on a global scale. The World Health Organisation (WHO) noted that more than 41 million people die from Non-Communicable Diseases (NCDs) with 77% of that staggering death occurring in the Low-and-Medium Income Countries (LMIC) where Nigeria is also categorised. It further noted that unhealthy diet increases the chances of dying from a NCD.

In 2019, the world was thrown into a bit of turmoil when the COVID-19 struck. The fatalities recorded in the period till this moment were mostly in cases with pre-existing conditions, majorly cardiovascular diseases (CVDs). Two years on, there is considerable increase in cases of CVDs and NCDS generally. While we are not out of the woods yet, with reports of new cases as news emerge from time to time, we must not neglect medical conditions that are deadly and continue to kill silently.

As different agencies of government prepare to defend their budget for the year 2023, the National Assembly and the executive arm of government must do everything possible to retain the SSB tax for the fiscal year even if they cannot increase it.

The SSB tax is a pro people, pro health tax that would reduce the demand and ultimately, the consumption of SSBs in Nigeria. However, the current tax rate has been absorbed by the producer, thereby making it possible for Nigerians hooked on these products to continue consumption at the same rate as before the tax was introduced.

For the tax to deliver on its health promises, the retail prices of sugar sweetened beverages would be increased by 20% or greater, according to the recommendations of the WHO and other global health experts.

More importantly, the SSB tax is not a burden for the public but an additional payment only for lovers of ultra-processed sugary drinks. It is also not a tax that would drive investments away from the country or cause small businesses to go down since the tax would be transferred to buyers, as they have always done.

As against the false narrative peddled in the media, the sugar sweetened beverages tax is only a N10/litre tax on sugar sweetened beverages and not sugar. This lie has travelled for too long, through deliberate distortion and misuse of terms.

Claiming that the tax is solely to shore up government’s revenue is another distortion that has gone too far. The tax would only reduce consumption when increased and enforced efficiently as the Nigerian Customs Service (NCS) is currently doing with the tax regime.

The revenue generated from this should be earmarked for NCD treatment and/or properly channeled into a sustainable health financing framework that would see successive governments improve on it while delivering Universal Health Coverage for the Nigerian population.

By Abayomi Sarumi, Corporate Accountability and Public Participation Africa (CAPPA)

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