The federal government has in troduced an excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages.
Zainab Ahmed, Minister of Finance, Budget and National Planning, disclosed this during the public presentation of the 2022 Appropriation Act yesterday in Abuja.
Excise duty is a form of tax imposed on the locally manufactured goods.
The new policy, now referred as ‘Sugar Tax’, is contained in the Finance Act signed into law by President Muhammadu Buhari on December 31, 2021.
The Minister said the excise duty on soft drinks would discourage excessive consumption of sugar beverages which contributes to diabetes, obesity among others.
She stated: “There’s now an excise duty of N10/ per litre imposed on all non-alcoholic and sweetened beverages; And this is to discourage excessive consumption of sugar in beverages which contributes to a number of health conditions including diabetes and obesity.
On December 14, 2021, the Organised Private Sector, OPS, notified its rejection of the plans by government to reintroduce excise duty on carbonated drinks.
Communicating the position of the OPS, the Chairman, Mr Taiwo Adeniyi, stated: “It is instructive to note that Nigerian manufacturers have been contending with the dislocations caused by the pandemic and the recession that followed; they are also facing serious crisis resulting from liquidity challenges in the foreign exchange market, which is impacting adversely on the cost of production; in addition, they are faced with intense pressure arising from numerous structural bottlenecks that are creating sustainability challenges for investors, especially those in the SME segment.
Also of concern is significant spike in the cost of raw materials, cost of fund, high import duty, elevated energy cost, prohibitive cost of transportation and high cost of logistics/shipping.