Carbonated drinks are set to become more expensive following the new approved tax framework for sugar-sweetened beverages by the Senate.
A new rate replacing the current flat-rate excise duty of ₦10 per litre with a percentage-based levy tied to retail prices which ranges from 300 naira to 500 naira.
The proposal is formed as part of new amendments of Nigeria’s customs and excise laws, aimed to discourage excessive sugar consumption. While generating more funds for public health programmes in order to tackle non-communicable diseases such as diabetes, obesity and hypertension.
Recall that beverage manufacturers and importers pay a fixed ₦10-per-litre tax on the previous tax administration. The Senate lawmakers argued that inflation has reduced the impact of the levy, prompting the shift to a price linked model that could increase the cost of soft drinks and other sweetened beverages.
Public health advocates says higher taxes on sugary drinks can help reduce sugar consumption while providing the dedicated funds for health promotion and disease prevention initiatives.
However, some business groups and industry stakeholders have warned that additional taxes could raise production costs, increase consumer prices and place further pressure on manufacturers already grappling with economic challenges.
The measure has been passed by the Senate but will still require completion of the legislative process before it can take full effect.
Notably, the new exact rate is expected to be determined by the Minister of Finance.
By Musekir Faisat Omolara
