The Manufacturers Association of Nigeria (MAN) has warned the federal government against implementing a tax stamp system for excisable products in Nigeria, stating that it often imposes heavy compliance costs, creates operational bottlenecks, and yields limited incremental revenue.
While commending the government on efforts to harmonise and modernise tax administration, and promote greater accountability within Nigeria’s tax system through the enactment of the Nigeria Tax Act 2025, MAN expressed concern that plans to introduce a Tax Stamp System for excisable goods could derail these gains and distract from the push for greater accountability in the tax system.
Segun Ajayi-Kadir, director general of MAN, stated that while the efficacy of this measure is yet to be validated, findings indicate that tax stamps portend significant adverse implications without tangible benefits.
Kadir also warned that introducing a tax stamp system would contradict the Nigeria Tax Act 2025, which was designed to simplify taxes and ease the burden on small and medium industries (SMIs).
He argued that the measure would amount to imposing a hidden tax, eroding the reliefs granted under the new law, and weakening the federal government’s efforts to support local manufacturing and job creation.
He further cautioned that the system could fuel illicit trade, increase production costs, and push these costs on consumers.
Other concerns raised by MAN include the risk of weakening Nigeria’s competitiveness under AfCFTA, discouraging investment, threatening jobs, and creating fertile ground for counterfeit products.
Citing both African and global experience, Kadir noted that while Gulf states have seen limited success with the Tax Stamp System, due to strong customs enforcement and subsidies, countries like Kenya, Uganda, Tanzania, and Ghana report high compliance costs, reduced competitiveness, and persistent smuggling.
“While compliance in Saudi Arabia & Gulf States is higher (due to stronger customs enforcement), costs are offset by state support and modern border infrastructure, conditions not yet present in Nigeria.
“Tax stamps are only effective in limited contexts with a powerful enforcement capacity and government subsidies. In most emerging markets, they increase costs, shrink formal markets, and encourage illicit substitutes,” he stated.
MAN DG further urged the government to adopt more innovative and more cost-effective alternatives that strengthen tax compliance enforcement rather than imposing blanket excise tax stamps that will unduly burden manufacturers.
Kadir also called on the government to be wary of and reject any persuasion to roll out or implement Excise Tax Stamps, in whatever guise or form, until a comprehensive stakeholder engagement process is undertaken and an inclusive impact assessment study is carried out.
“Rely on existing digital systems (ERS and E-invoicing) which already provide end-to-end tracking and transparency, avoiding duplication and unnecessary vendor-driven solutions.
“Protect the gains of the 2025 Tax Reform Acts by avoiding measures that reintroduce complexity and costs, particularly for SMIs,” he added.
MAN therefore implored the government not to succumb to the proposal to introduce Tax Stamps, instead, they should strengthen existing digital fiscal tools and border controls to achieve compliance without imposing undue burdens on industry.
