MAN kicks against reintroduction of tax stamp on excisable goods

The Manufacturers Association of Nigeria (MAN) says is against the plan by the Federal Government to reintroduce Tax Stamp on excisable goods, noting that the tax would not only erode the gains of the 2025 Tax Reforms, especially on Small and Medium Industries (SMI), but would cause a rise in the costs of manufacturing and retail prices of goods in the open market.

The MAN Director General, Segun Ajayi-Kadir mni, expressed the association’s displeasure over the reintroduction of Tax Stamp System in a statement he personally signed and made available to PortNews in Lagos on Tuesday, September 23, 2025.

Segun Ajayi-Kadir, who listed various concerns of the MAN against the tax, said the Tax Stamp System would lead to upsurge in illicit trade while Nigerian products may face a severe competition with other goods in the African Continent Free Tade Agreement (AfCFTA).

He added that a paper-based tax stamp is prone to falsification, making it extremely difficult for consumers and retailers to distinguish between genuine and counterfeit products.

According to the MAN Director General, “It is pertinent to note that Nigerian manufacturers compete with imported brands within AfCFTA and beyond. Introducing additional costs in the form of tax stamp will increase production costs and render locally made products less competitive in regional markets.

“Our experience in other markets equally shows that digital stamps are counterproductive, cutting productivity by up to 40%, and have not reduced illicit trade. So, in all cases, rather than strengthening enforcement, tax stamps have not abated the circulation of counterfeit goods, they undermine both government revenue and the profitability of legitimate industry players.”

Ajayi-Kadir maintained that there are existing digital systems such the Nigeria Customs Service’s B’Odogwu Automated Excise Register System (ERS) and the Federal Inland Revenue Service (FIRS) e-invoicing, which captures production and sales data. “These tools already give Government the visibility that tax stamps claim to provide without adding redundant layers,” said he.

Citing many countries where Tax Stamp has been jettisoned as a result of bad effects on their national economies, Ajayi-Kadir said “We are therefore disturbed about an imminent distraction from this positive narrative in the form of a possible introduction of a Tax Stamp System for excisable goods. 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.

“As we stated in 2018 when the Tax Stamp was initially suggested to Government and was roundly rejected, this fleeting proposition is typically the refrain of vendors who propose tax stamps as a measure against illicit trade. While the efficacy of this measure is yet to be validated, findings indicate that tax stamps portend significant adverse implications without tangible benefits.

“However, as a critical stakeholder, MAN notes with concern that the proposed Tax Stamp System warrants careful reflection and caution. We firmly believe that while the intention is understandable, evidence around the world shows that the Tax Stamp System often imposes heavy compliance costs, creates operational bottlenecks, and yields limited incremental revenue.”

On the way forward, the MAN Director General concluded by saying “MAN strongly urges the Federal Government to exercise caution in introducing a Tax Stamp System in Nigeria. Experiences in the international environment shows that tax stamps often hinder local industry, erode gains in tax simplification, and yield a limited revenue impact. We therefore implore the Government not to succumb to the proposal to introduce Tax Stamps, instead Government should strengthen existing digital fiscal tools and border controls to achieve compliance without imposing undue burdens on industry.”