Stakeholders in Nigeria’s manufacturing sector have raised fresh concerns over the Federal Government’s decision to proceed with its proposed tax stamp system for excisable goods, warning that the move could undermine the fragile recovery recorded in the industry.
Industry sources who spoke to journalists said the initiative, also referred to as a track-and-trace system, would impose additional financial and operational burdens on manufacturers, with likely ripple effects on consumers through higher product prices.
The tax stamp system is a regulatory mechanism requiring a high-security physical label or digital code to be affixed to excisable products such as alcohol, tobacco, and sugary drinks to confirm that applicable taxes have been paid.
Although an official commencement date has not been announced, the Comptroller-General of the Nigeria Customs Service, Adewale Adeniyi, recently met with stakeholders to discuss implementation plans and introduced the selected vendor, Authentix Inc., an American-based firm.
Manufacturers acknowledged that the government’s objective may be to curb illicit trade, enhance transparency in excise administration, and boost revenue. However, they warned that the system comes with significant cost and operational risks.
One industry source, who requested anonymity, said: “This proposal is coming at a time when operators are already grappling with rising excise rates, foreign exchange volatility, and high inflation. An additional burden of implementing tax stamps is a serious threat to business sustainability.”
Another stakeholder expressed concern that the proposed model is a hybrid paper-digital system rather than a fully digital platform. “In today’s digital world, where real-time supply chain monitoring is standard, any system that is not fully digital is inherently deficient,” the source said.
He added that the government has already invested in home-grown digital solutions, including the recently launched B’Odogwu automated Excise Reporting System (ERS), which digitises excise administration.
Industry players argue that strengthening existing local platforms would be more efficient than introducing a foreign-backed tax stamp framework.
The Manufacturers Association of Nigeria (MAN) had earlier submitted a position paper opposing the initiative, stating that it contradicts provisions of the Nigeria Tax Act 2025.
In a statement signed by Segun Ajayi-Kadir, its Director-General, MAN warned: “The introduction of a tax stamp system risks clawing back the gains of tax rationalisation, effectively imposing a new hidden tax on industries under the guise of compliance.”
The association also cautioned that the high logistical costs primarily benefit the vendor, not the government or industry, and could encourage illicit trade by pushing consumers toward cheaper alternatives.
Similarly, consulting firm PwC raised concerns in a January position paper, noting that with the planned e-invoicing rollout by the Federal Inland Revenue Service (FIRS) and the B’Odogwu portal by Customs, businesses are already facing multiple compliance requirements.
PwC warned that the additional system could:
- Increase operational and financial pressure on manufacturers
- Erode profitability
- Lead to higher consumer prices
- Potentially reduce overall government tax revenue
