The Federal government has introduced an excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages, with a likelihood of pushing up the retail prices of what is popularly called soft drinks.
Excise duty is a form of tax imposed on the production, licensing and sale of goods.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed this Wednesday, during the public presentation of the 2022 Appropriation Act in Abuja.
According to her, the new policy introduced is in the Finance Act signed into law by President Muhammadu Buhari on December 31, 2021.
In 2019, Zainab Ahmed, the minister of finance, had announced that the government may introduce excise duty on carbonated drinks.
In 2020, the Comptroller-General of the Nigeria Customs Service (NCS), Hameed Ali, had proposed the collection of excise duty on soft drinks.
He had also put forward the same proposal in 2021 at an interactive session on the 2022-2024 medium-term expenditure framework (MTEF), organised by the house of representatives committee on finance.
Apart from the new ‘Sugar Tax’ in section 17, Ahmed said the 2021 finance Act also raised excise duties and revenues for the health sector.
The minister said the excise duty on soft drinks would discourage excessive consumption of sugary beverages, which, according to her, contributes to diabetes, obesity among others.
However, other sources of sugar intake include alcoholic drinks, biscuits, buns, cakes, dairy products, and savoury food.
“There’s now an excise duty of N10/ per litre imposed on all non-alcoholic and sweetened beverages,” she said.
“And this is to discourage excessive consumption of sugar in beverages which contributes to several health conditions including diabetes and obesity.
“But also used to raise excise duties and revenues for health-related and other critical expenditures. This is in line also with the 2022 budget priorities.”