The National Union of Food, Beverage and Tobacco Employees (NUFBTE) has warned that the proposed amendment to Nigeria’s Customs and Excise Tariffs could trigger factory closures, job losses and further damage to the manufacturing sector.
The union urged the House of Representatives to reject the Customs, Excise Tariffs, Etc. (Consolidation) Amendment Bill, 2025, popularly known as the CETA Bill, warning that the proposed tax changes would impose another burden on workers and manufacturers already struggling with rising operating costs.
In an open letter to the Speaker of the House, Abbas Tajudeen, NUFBTE President, Garba Dankama, said the timing of the proposed legislation was inappropriate given the impact of recent economic reforms on businesses and households.
The bill seeks to replace the existing specific tax of N10 per litre on soft drinks with a percentage-based levy tied to the retail price of the products.
Dankama said such a shift could significantly increase the tax burden on producers and eventually push up consumer prices, weaken demand and force more factories to scale down operations or shut down.
He said the manufacturing sector was already facing severe pressure from high borrowing costs, rising energy and logistics expenses, foreign exchange constraints and declining consumer purchasing power.
“Capacity utilisation across manufacturing has declined sharply as producers contend with prohibitively high borrowing costs, rising energy and logistics expenses, persistent constraints in foreign exchange access, and weakened consumer purchasing power,” Dankama said.
He warned that further tax increases could lead to additional production cuts, retrenchments and disruptions across the value chain.
According to him, the food, beverage and tobacco sector supports hundreds of thousands of jobs across farming, transportation, distribution and retail and cannot absorb another significant increase in taxation without serious consequences.
Dankama said Nigerian workers were already struggling with the effects of the removal of fuel subsidy and foreign exchange reforms, while incomes had failed to keep pace with rising transportation, food, housing and other living costs.
“The sector needs room to adjust to the current economic realities and remain sustainable. An aggressive percentage-based tax at this time could place a serious strain on the industry, with consequences for investment, jobs, and livelihoods,” he said.
The NUFBTE president also argued that the proposed percentage-based levy would expose manufacturers to additional volatility because production costs remain vulnerable to global commodity prices and geopolitical developments.
He warned that increased taxation could ultimately produce higher prices and weaker consumer demand, creating further pressure on factories.
Dankama also questioned the expected public health benefit of the proposed tax, arguing that soft drinks account for only about five per cent of national sugar consumption.
“Taxing a product category that contributes only 5% of national sugar intake will not yield real public health benefits. It will simply push consumers toward cheaper, unregulated alternatives,” he said.
He said such an outcome could threaten the livelihoods of more than one million Nigerians connected directly or indirectly to the sector.
NUFBTE called on the House leadership to withhold concurrence on the bill and protect workers and manufacturers from what it described as an additional financial burden at a time of severe economic pressure.
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