Setting The Records Straight On SSB Tax By Adebayo Sarumi

Setting The Records Straight On SSB Tax

By Adebayo Sarumi

There have 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 a furore in certain quarters ever since, the latest coming from carbonated drinks producers.

According to the Financial Act 2021, carbonated drinks, referred to as SSBs now carry an 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 projecting the fact that the government is out to protect the citizenry from the consumption of sugary drinks with no nutritional benefits yet, and 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 life 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 in human capacity.

In Nigeria today, more than 77 per cent 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 per cent 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 per cent of that staggering death occurring in the Low-and-Medium Income Countries (LMIC) where Nigeria is also categorized. It further noted that an unhealthy diet increases the chances of dying from an NCD.

In 2019, the world was thrown into a bit of turmoil when the COVID-19 pandemic 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 a 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 emerges 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 an N10 per 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 the 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 channelled into a sustainable health financing framework that would see successive governments improve on it while delivering Universal Health Coverage for the Nigerian population.

 

Sarum, a staff of the Corporate Accountability and Public Participation Africa (CAPPA), writes from Lagos