Sweet, Sweet, Tax?

The world is currently going through economic upheaval, with rising living costs in all aspects of our lives. From fuel to food, rent to rice, gas to garri- we all have to adjust our spending habits and tighten our purse strings. So the last thing that anyone wants to hear right now is that there is an additional tax on anything; however, the plot twist is that this article is about a good and sweet (pun intended) tax that is better for all of us. A ‘pro-health’ tax. It is also about the determination and hard work of individuals who have worked tirelessly to ensure that the Nigerian Government focuses on more long-term policies that benefit health and well-being.

There’s a saying that “you are what you eat,” which rings true for Nigerians. Our well-renowned carbohydrate-rich, fatty, oily, sweet, and juicy cultural meals and diets have made us a highly diabetic nation. We also seem to target many multinational soft drink manufacturers, who tend to feed us the sweetest and most inorganic versions of juices and carbonated drinks. In 2019, Nigeria recorded the 4th highest soft drink sales globally by volume and the 7th highest consumption of carbonated soft drinks per capita. Sadly, the intake of sugar-sweetened beverages (SSBs) is increasing in many low- and middle-income countries, mainly due to urbanization and economic development, which have increased the availability of these beverages.

Sugar-sweetened beverages (SSBs) are a significant source of added sugars in our diets. The correlation between SSBs and non-communicable diseases (NCDs) such as diabetes mellitus (DM), chronic cardiovascular diseases, and complications (such as stroke, kidney failure, heart attack, blindness, lower-limb amputation, etc.), and some cancers, is compelling. Nigeria currently has the highest incidence of diabetes in Sub-Saharan Africa. Ethiopia and South Africa previously had higher rates. Still, the number of cases in Nigeria has consistently risen in recent years. It is projected to increase further if there are no adequate public health and economic measures. Of the total deaths in Nigeria, 24% are caused by NCDs; however, this is a conservative figure. The International Diabetes Federation (IDF) estimates that approximately two-thirds of people with diabetes in Africa are undiagnosed.

Read also:  How excess taxes on telecom operators hurt consumers

There are many misconceptions about diabetes that may make it seem far removed from our realities, primarily due to its chronic nature and slow progression. So before we elaborate on the sugar-sweetened beverage tax, here is a bite-sized description of the condition and its subsets. Diabetes is a chronic disease that occurs either when the pancreas does not produce enough insulin or when the body cannot effectively use the insulin it produces. Insulin is a hormone that regulates blood sugar. There are several types of diabetes:
Type 1 diabetes (childhood-onset diabetes) could be hereditary or caused by an autoimmune reaction.
Type 2 diabetes results from the body’s ineffective use of insulin. Insulin resistance is usually caused by high blood sugar, mainly due to excess body weight and lack of physical activity. Type 2 DM was previously only seen in adults, but it is increasingly more common in children due to rising rates of obesity.
Gestational diabetes occurs in pregnancy due to high blood glucose above normal. Women with gestational diabetes have a higher risk of complications during pregnancy and delivery, and their children are also at an increased risk of developing T2DM in the future.
Impaired glucose tolerance (IGT) and impaired fasting glycemia (IFG) are intermediate conditions between normality and the development of diabetes.

The Tax

NCDs, like diabetes, are silent killers, so any actions toward curbing the rising statistics must be intentional, coordinated, and amplified. Other methods must be deployed in a country where the ‘diabetes specialist to population’ ratio is estimated to be as low as 1 to 600,000.

Through national polls, the creation of digital educational material, documentaries, symposiums, lobbying the ministries of health and finance, and a year-long campaign against all odds, the SSB tax was signed into law as a part of the 2021 Finance Act. This law adds 10 Naira to each liter of all non-alcoholic and sweetened beverages, levying the duty of soft drink manufacturers and distributors. This method of taxation on SSBs has been implemented, tried, and tested in other countries, such as Norway in 1981, Saudi Arabia in 2017, South Africa, Ireland, and the United Kingdom (UK) in 2018.

Studies that evaluated SSB taxes globally have found that taxation decreases sales, purchasing, and consumption of taxed beverages. For example, the UK adopts a tiered tax system on SSBs, based on sugar content (£0.24 per liter for drinks containing ≥8 g total sugar per 100 ml, and £0.18 per liter for drinks containing between 5 g and <8 g natural sugar per 100 ml); it was designed to encourage reformulation of drinks by manufacturers and to curb any potential damage on industry sales. One year after implementation, there was no change in the volume of soft drinks purchased, but the quantity of sugar purchased in these beverages decreased by 30 g per household per week.

There is usually a lot of skepticism related to such anomalous measures; however, 54% of Nigerians support a tax if the money is invested in programs that improve health and nutrition. The SSB tax has also been criticized in the Manufacturers Association of Nigeria (MAN) report. They have deemed it counterproductive and costly to the government and have cited a projected loss of N1.9 trillion naira between 2022 and 2025. The MAN report does not offer any potential public health benefits considerations.

A single can of a sugary drink contains about 40 grams of free sugars (approximately ten teaspoons of table sugar). According to WHO data, people who consume SSBs regularly have a 26% greater risk of developing type 2 diabetes than people who rarely consume such drinks. There are many reasons why taxation on SSBs is an effective intervention to encourage the reduction of sugar intake, from positive physiological changes and individual health benefits to public health awareness and cost savings.

The coalition of National Action on Sugar Reduction (NASR) is made up of:
● Diabetes Association of Nigeria
● Nutrition Society of Nigeria
● Nigeria Cancer Society
● Breast Without Spot
● Lafiya Wealth Initiative
● TalkHealth9ja
● Nigeria Health Watch
● Project PINK BLUE
● Sustainable Development Initiative
● African Youth Initiative on Population, Health, and Development (AfrYPoD).

For more information, visit @reducesugarng on Instagram and www.nasr.ng.

Dr. Helen Zidon (MB BCh BAO LRCP & SI)
Head of Medical Information- Aspen Pharma Group

Dr. Helen Zidon is the Head of Medical Information at Aspen Pharma Group, where she oversees the medical information functions of Aspen territories globally for multiple widely used pharmaceutical products. She is a public speaker, life science career coach, and an advocate for Global and Public Health, accessible and streamlined medical care, and the incorporation of Medical Technology in medical academia and medical practice.