By Jemimah Wellington, JKNewsMedia Correspondent
THE MANUFACTURERS Association of Nigeria (MAN) has commended government efforts to modernise tax administration through the enactment of the Nigeria Tax Act 2025, while warning against a proposed introduction of a Tax Stamp System for excisable goods.
In a statement signed by its Director General, Segun Ajayi-Kadir, MAN said its members welcomed the Nigeria Tax Act 2025 because it simplified the tax framework, harmonised multiple regimes and delivered relief to industries, particularly small and medium-sized industries.
The association, however, expressed concern that the consideration of a tax stamp scheme could undermine the progress achieved under the new Act.
MAN acknowledged that government interest in tax stamps was predicated on perceived benefits such as curbing smuggling and counterfeiting, enhancing transparency in the excise regime, and supporting revenue growth.
The statement recalled that a similar proposal in 2018 was widely rejected as findings indicated that tax stamps carried adverse implications without tangible benefits.
According to the association, international evidence showed that tax stamps typically imposed high compliance costs, created operational bottlenecks, and delivered limited revenue gains.
MAN stated that the proposal required careful reflection, stressing that while the intention might appear understandable, its impact could reverse the gains of the 2025 Act.
The association highlighted contradictions with the Nigeria Tax Act 2025, noting that while the Act consolidated taxes and provided relief for businesses, a tax stamp system would effectively reintroduce costs disguised as compliance measures.
It described such a move as “giving with one hand and taking back with the other,” a burden that would fall disproportionately on small and medium industries.
The manufacturers warned that implementation could fuel illicit trade, as high compliance costs would increase prices and push consumers toward cheaper, illicit goods.
They noted that producers and importers might be forced to pass on costs to consumers already dealing with inflationary pressures.
The statement pointed to Nigeria’s existing digital excise monitoring tools, including the Nigeria Customs Service’s B’Odogwu Automated Excise Register System and the Federal Inland Revenue Service’s e-invoicing platform, which already provide government with real-time visibility of excise operations.
MAN further argued that introducing tax stamps would create unnecessary duplication.
It added that a tax stamp system would weaken Nigeria’s competitiveness under the African Continental Free Trade Area (AfCFTA) by raising production costs, thereby making local goods less competitive against imports.
The association further warned of possible job cuts, reduced consumer demand, lost revenue, and higher risks of counterfeit goods circulating through paper or digital tax stamps.
Drawing from international experiences, MAN cited the implementation of similar systems in Kenya, Tanzania, Uganda and Ghana, which resulted in high compliance costs, litigation, reduced competitiveness, and limited impact on illicit trade.
It also referenced reforms in the United Kingdom, where the government recognised tax stamps as outdated, costly and ineffective.
In its recommended position, MAN reiterated its members’ commitment to excise contributions but warned that a tax stamp system would worsen the already difficult business environment, which is affected by high excise rates, energy costs, and inflation.
It urged government to avoid implementing excise tax stamps without comprehensive stakeholder engagement and an inclusive impact assessment.
The association called on government to rely on existing digital tracking systems, protect the gains of the 2025 Tax Act, and adopt transparent frameworks that balance revenue goals with business sustainability.
It urged consideration of alternatives such as border enforcement, digital traceability pilots, and risk-based audits as more cost-effective solutions.
MAN concluded by strongly advising the Federal Government not to proceed with the proposal, stating that experiences across other markets demonstrated that tax stamps hindered local industries, eroded the gains of tax simplification, and yielded limited revenue impact. I
t urged the government to instead strengthen existing fiscal tools and border controls to achieve compliance without imposing additional burdens on manufacturers.
