The Manufacturers Association of Nigeria (MAN) has cautioned the Federal Government against introducing a tax stamp system for excisable goods, warning that it could trigger heavy compliance costs, operational bottlenecks, and minimal revenue gains.
In a statement issued yesterday, MAN’s Director General, Segun Ajayi-Kadir, acknowledged the enactment of the Nigeria Tax Act 2025, describing it as a welcome development for simplifying tax frameworks, harmonizing regimes, and granting relief to industries, particularly small and medium-sized industries (SMIs). However, he stressed that the proposed tax stamp initiative undermines the positive narrative of the new tax laws.
“MAN understands that this consideration is predicated on the supposed benefits of curbing smuggling and counterfeiting, enhancing transparency and traceability in the excise regime, and supporting revenue growth. However, evidence around the world shows that tax stamps often come with heavy compliance costs, create operational bottlenecks, and deliver limited incremental revenue,” Ajayi-Kadir said.
He outlined several concerns, including:
- A contradiction of the Nigeria Tax Act 2025’s objectives.
- The risk of fueling illicit trade.
- Increased production and compliance costs that would be passed on to consumers.
- Loss of industry competitiveness within AfCFTA and global markets.
- Reduced consumer demand and possible revenue losses.
- A rise in counterfeit circulation despite costly implementation.
Ajayi-Kadir further noted that government has already invested in efficient digital systems such as the B’Odogwu Automated Excise Register System (ERS) launched by the Nigeria Customs Service and the e-invoicing platform of the Federal Inland Revenue Service (FIRS), which both provide real-time visibility into excise operations and capture production and sales data.
“These tools already give government the visibility that tax stamps claim to provide without adding redundant layers,” he emphasized.
He concluded that imposing a tax stamp system at a time when manufacturers are already struggling with rising excise rates, high energy costs, inadequate power supply, and soaring inflation would pose a serious threat to industrial sustainability.
