The Manufacturers Association of Nigeria (MAN) has called on the Federal Government to be wary of and reject any proposal to rollout or implement Excise Tax Stamps, warning that doing so will pose a serious threat to Nigeria’s industrial sustainability.
MAN expressed worries that a tax stamp policy is coming at a time when industrial operators are already grappling with rising excise rates, high energy prices, inadequate energy supply, and high inflation, making the additional burden of implementing tax stamps a serious threat to industrial sustainability.
MAN Director General Segun Ajayi-Kadir urged the Federal Government to exercise caution in introducing a tax stamp system in Nigeria, pointing out that experiences in the international environment show that tax stamps often hinder local industry, erode gains in tax simplification, and yield a limited revenue impact.
Ajayi-Kadir, in a statement, which was made available to The Nation, called on the government to “reject any persuasion to implement excise tax stamps, in whatever guise or form it may take, until a comprehensive stakeholder engagement process is undertaken and an inclusive impact assessment study is carried out.”
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In calling for the rejection of any proposed excise tax stamps, Ajayi-Kadir said manufacturers are concerned that its introduction risks clawing back gains of the Tax Act 2025, which consolidated and rationalized taxes, providing businesses, especially SMIs, with relief from multiple levies.
According to him, the introduction of a tax stamp system will effectively impose a new “hidden tax” on industries under the guise of compliance.
“Such a measure is tantamount to ‘giving with one hand and taking back with the other,’ undermining the relief granted under the 2025 Tax Act.
“SMIs, in particular, would bear disproportionate burdens, weakening the Federal Government’s drive to promote local manufacturing and job creation,” Ajayi-Kadir kicked.
He also pointed out that the high logistical costs and risks associated with tax stamps primarily benefit the vendor, not the government or the industry.
There is also a tendency that the Nigerian market risks an upsurge in illicit trade, which will erode government revenue, harm legitimate businesses, and jeopardize consumer safety.
MAN also expressed concern that producers and importers may raise prices to recover compliance costs, further straining consumers and potentially driving them toward cheaper, illicit alternatives.
The Association further drew attention to risk to industry competitiveness, noting that Nigerian manufacturers compete with imported brands within the African Continental Free Trade Area (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,” it said.
MAN also cautioned that the implementation of a tax stamp system will inevitably raise production costs and discourage local patronage.
“At a time when households are already grappling with high inflationary pressures, the introduction of tax stamps would push consumers toward cheaper imported alternatives, fuel illicit trade, and risk driving local manufacturers out of the market,” Ajayi-Kadir said.
Besides, international studies, according to him, show that while stamp systems can increase reported excise revenue, the compliance costs (borne by manufacturers) often exceed the marginal revenue gains.
“In particular, a 2020 academic study from the University of Cape Coast found that compliance costs significantly affect small taxpayers’ profitability and tax compliance in Ghana,” he stated.
Also, paper-based tax stamps, in particular, are prone to falsification, making it extremely difficult for consumers and retailers to distinguish between genuine and counterfeit products.
In the same vein, Ajayi-Kadir said experience in other markets equally shows that digital stamps are counterproductive, cutting productivity by up to 40 per cent, 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,” he said.
Other concerns raised by MAN include the fact that the implementation of tax stamps comes with significant economic and operational burdens; added costs could force producers and distributors to cut jobs across the value chain; and higher operating costs would limit reinvestment, stifle innovation, and discourage new market entrants.
Ajayi-Kadir said government should, instead, rely on existing digital systems like the Nigeria Customs Service B’Odogwu Automated Excise Register System (ERS) and E-invoicing), which already provide end-to-end tracking and transparency, avoiding duplication and unnecessary vendor-driven solutions.
The MAN DG also stressed the need to protect the gains of the 2025 Tax Reform Acts by avoiding measures that reintroduce complexity and costs, particularly for Small and Medium Industries (SMIs).
The Association also urged the government to seek a transparent framework for policy design and implementation that balances its revenue goals with the need for a fair and conducive business environment.
It further urged the government to adopt smarter and more cost-effective alternatives that strengthen tax compliance enforcement rather than imposing blanket excise tax stamps that will unduly burden manufacturers.
MAN also said targeted border enforcement will help curb leakages and smuggling, digital traceability pilots can provide transparent and real-time monitoring of products, while risk-based audits will ensure that compliance efforts are focused where risks are highest.
The Association, however, said it appreciates government’s efforts to harmonize and modernize tax administration, and promote greater accountability within Nigeria’s tax system through the enactment of the Nigeria Tax Act 2025.
“Our members widely welcomed the Laws as they provide a simplified tax framework, harmonize the tax regime and deliver relief to industries, particularly the Small and Medium-sized Industries (SMIs),” Ajayi-Kadir said.
He, however, said “MAN is 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.”
He noted that as MAN 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.”
The MAN DG said 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”
Ajayi-Kadir unequivocally reiterated MAN members’ commitment to excise contributions, but firmly maintained its position on deliberate private–public sector efforts to co-create a conducive operating environment for industries to thrive.
“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,” he stated.
