Opinions

Soft drinks tax: One tax too many for Nigerians

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3 years ago

Nigerians in the wake of the New Year 2022, were greeted with a new tax of N10 per litre imposed on all non-alcoholic and sweetened beverages produced and sold in Nigeria Federal Government. At the end of 2021, consumers suffered from an inflation rate of over 15 per cent amid the increasing cost of food products by 100 per cent and more from the original price. This in part was caused by the economic policies of the present administration, which included the closure of land borders to the importation of food items, and in part, by the rising insecurity in the country that has affected farmers, and consequently, food production, leading to the scarcity of farm produce.

However, as Nigerians are struggling to afford scarce and expensive food items, the government decided that an extra N10 on fizzy drinks, called the Sugar Tax, would not affect the pockets of the masses. The government claims to fight obesity and other sugar-related diseases with this new tax, and also increase government revenue, annually. For a government that is from the nation’s Pension Fund meant to cater for retirees, I believe that revenue generation is the main reason for this tax, and not the health of Nigerians.

Soft drinks have, in a way, become a part of the meals taken by Nigerians daily. Restaurants and fast-food chains collaborate with the companies that produce soft drinks to advertise and promote their products and businesses. Some meals come as a “combo” with any favorite soft drink in most fast food outlets. Adding a N10 tax on any soft drink produced will affect these businesses as consumers are already burdened with the rising cost of food. Soft drinks are most likely to be avoided by regular consumers for a while, before they adjust to the new price (or not).

Companies that produce these drinks may need to focus on reducing their inventory, as demands for their products will decline because of the new tax in place. Staff of these companies may be negatively affected in one way or the other, and being consumers in their own right who need to take care of their families, there would be a reduction in their purchasing power as their salaries may be affected also.

The tax on soft drinks in Nigeria can clearly be seen as discriminatory. For consumers of soft drinks, it is puzzling that this new tax has to be placed on their favorite beverages without any concrete reason for it.

Chukwuemeka Ezeugo,

Lagos.

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The concessionaires complained of poor cooperation from state governments who mostly delay in meeting their own part of the agreement, for instance in the area of land provision.

Another major challenge they emphasised was the lack of narrow gauge rail lines in and out of the dry ports which they noted was important to make the operation of the ports efficient.

They added that access to funds also remained a major issue even as banks and foreign investors make unreasonable demands for assets and bank bonds before the release of funds.

The concessionaires unanimously stressed the need for the ports being constructed to be given the status of port of origin and destination and also to be registered with the International Chamber of Commerce (ICC) upon completion.

In view of the delay in execution, the concessionaires stressed the need for a new agreement, pointing out that an agreement started in 2017 between them and the NSC but it was yet to be cleared by the Federal Ministry of Justice on behalf of the Federal Ministry of Transportation.

They however commended the ICRC for its intervention and also appreciated the NSC for their support so far, noting that they were confident that under the administration of President Muhammadu Buhari, the contracts will be sorted out.

The concessionaires pledged their commitment to see the concession to conclusion and the ports operational even as two of the concessionaires, Equatorial Marine Oil and Gas Ltd for the Katsina ports and Dala Inland Dry Port for the Kano Ports declared that their ports will commence operation before the third quarter of 2022.

Managing Director of Equatorial Marine Oil and Gas Ltd, Mr Usman Iya Abbas, informed the ICRC team that the Funtua port was already at over 85 per cent completion and was ready to launch before the end of the second quarter of 2022.

“We hope to commission this project before the end of the second quarter and the ports will become functional immediately. We are lucky to have great relationships in the shipping industry and with major shipping lines.

Managing Director, Dala Inland Dry Port Ltd., Hon. Ahmed Rabiu, concessionaires of the Kano Inland Port also hinted that the construction of the container depot was already nearing completion.

He assured that the company was working assiduously to ensure project completion and take off before the end of March 2022.

On his part, ICRC’s Director of Contract Compliance Department, Dr Ewalefoh who chaired the technical session of the meeting assured the concessionaires of the continuous support of the Commission, charging them however to send a detailed update of the contract status reports to the ICRC.

The Ag. Head, Media and Publicity of ICRC, Manji Yarling said he further enjoined the other four concessionaires who were yet to make remarkable progress in their contract execution to emulate the milestone recorded by the other two who were finalizing their constructions, so that the ports can yield the economic benefits for which the concessions were granted.

While thanking the stakeholders for honouring the invitation of the ICRC, it was resolved that going forward, there will be periodic meetings to ensure that the projects are speedily completed.