Introduction Of Sin Tax Will Reduce Burden Of Diseases, Increase Government Revenue- ACUF


Introduction of Sin Tax will reduce burden of diseases, increase government  revenue – ACUF -


Anthonia Obokoh 


The Amaka Chiwuike-Uba Foundation (ACUF) has commended President Muhammadu Buhari on the introduction of a N10 per liter excise duty on soft drinks, describing it as a welcome development and legislation that has been long awaited.

In a statement made available to the media in Enugu weekend and signed by the Board Chairman of ACUF, Dr Chiwuike Uba, the Foundation said the partial introduction of Sin Tax will not only lead to a drastic decline in the consumption of potentially harmful goods (especially Sugar Sweetened Beverages (SSBs)), but an increase in government revenue and improvements in the population health.

The statement reads: “We commend President Muhammed Buhari and the National Assembly for taking the bold decision to save the country from the costs associated with high consumption of such drinks in Nigeria. Nigeria really needs a comprehensive Sin Tax legislation to cut consumption of potentially health-threatening products, increase revenues for health financing and/or improve the health of the population. We are hopeful that the federal government will charge 100% excise duties on sugar-sweetened beverages, tobacco, alcohol and other potentially health-threatening products in Nigeria.

“The partial introduction of Sin Tax will not only lead to a drastic decline in the consumption of potentially harmful goods (especially Sugar-Sweetened Beverages (SSBs)), but an increase in government revenue and improvements in the population health.

“According to Statistics, in 2019, Nigeria was the seventh largest country with the highest consumption of soft drinks in the world, with more than 49 servings of 8 ounces per capita per year. By the way, the market is projected to grow by 17.12% per year between 2021 and 2026. Currently, more than 100 soft drink brands are made or bottled in Nigeria from about 15 bottling or drink manufacturers.

“Despite the established direct relationship between consumption of SSBs and increase in the prevalence of diabetes, stroke, heart attacks, cancer and associated deaths, the estimated average per capita consumption of soft drinks in Nigeria was approximately 57.02 liters in 2021. It was so because the price of these products was affordable. An increase in the price will discourage high consumption and ultimately boost agriculture through an increased consumption of organic fruits and fruit juice.”

He added: “Available data shows that Nigeria currently suffers from a rising prevalence of diabetes mellitus (DM), with about 5.8% (about 6 million) of adult Nigerians living with diabetes mellitus. In addition, it is estimated that the number of people suffering from glucose tolerance deficits will increase from 9.41 million in 2021 to 11.98 million in 2030 and to 18.79 million in 2045.

“Many children are currently living with type 2 diabetes in Nigeria, largely due to the high intake of sugar-sweetened beverages. Regular consumption of soft drinks has been established to cause abnormally high sugar consumption.

“Many studies have found that the recent rapid increase in early-onset colorectal cancer in adolescence and adulthood are largely attributed to the consumption of soft drinks. Consumption of two or more of these drinks per day exposes the consumer to double the risk of colorectal cancer and other cancers before the age of 50 years. In 2020, there were more than 124,815 new cancer cases in Nigeria, including more than 78,899 related deaths.

“As we mentioned earlier, the social and economic costs of disease associated with high consumption of soft drinks, alcohol, tobacco and other harmful substances are very high. No responsible government would just watch its people and its economy collapse over the easy consumption of these products.

“Related illnesses not only aggravate poverty and hunger in families, but also reduce the overall level of national productivity. The amount accumulated in revenue for businesses and taxes for the government is not comparable to the economic and social costs to families and the government.”

Continuing, he said: “According to the International Diabetes Federation (IDF), treating diabetes per person has gone from an average cost of N60,000 in 2011 to N300,000 in 2021. This figure is also expected to exceed N500,000 in 2030 and N1.0 million in 2045. In the same vein, the financial burden of diabetic foot problem in terms of direct costs of treatment is above N2 million. The government must make every effort to deter the high consumption of these sugary and products harmful to health.

“According to IDF, diabetes-related healthcare expenditures in Nigeria in 2021 were about N745 billion. This will increase to more than N1.07 trillion by 2030 and N1.59 trillion by 2045. The average treatment cost for a cancer patient is N30 million. In the same vein, a recent study revealed that tobacco companies contribute less than N100 billion to Nigeria’s GDP, while N526.4 billion are spent annually to combat tobacco-related diseases. In addition, tobacco accounts for over 28,878 deaths per year in Nigeria.

“How much revenue does the country generate from manufacturers and distributors of these products in relation to the associated economic, social and health costs on families and the government? Who even makes sure that the standards are met in producing these products? Reducing the incidence and prevalence of these diseases will improve the health of the population and hence overall economic activity, hence the need for the Sin Tax.

“Universal health coverage, the basis for resilient health systems, requires increased health funding. Health financing, on the hand, is one of the key building blocks of a robust health system and heavily taxing unhealthy products, such as sugar sweetened beverages is an easy way to raise funds for health.

“If the revenue generated from taxing these products is well spent, the Sin tax would become a victory for Nigeria’s health system, the poor and vulnerable who are already living below the poverty line and the country at large. The right to health is a fundamental right and the health of the population is the most basic and essential asset of the Country. It must take precedence over considerations for business profits at all times.”

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