FG Imposes N10/Litre Excise Duty On Carbonated Drinks

The federal government of Nigeria has introduced excise duty of N10 per litre on all non-alcoholic and carbonated drinks in the country. The action was in line with one of the nation’s 2022 agenda; which is to discourage people from consuming these sugary beverages.

Excise Duty is a tax imposed on the sell, production and licensing of products. This form of tax is at the discretion of the FG hence manufacturers are not armed with the monopoly of detecting the distribution chain.

The action of the government to impose the excise duty on carbonated drinks was made known to the public through the minister of finance, budget and national planning, Zainab Ahmed. The minister made the revelation during the public declaration of the 2022 Appropriation Act in Abuja on January 5th.

The appropriation act was signed into law by the president Muhammadu Buhari in December 2021 pending public announcement and implementation in January. This is under the Finance Act and one of the year-end new laws signed by the office of the presidency.

The case of introducing excise duty of N10 per litre on all non-alcoholic, sugary and carbonated drinks in the country started barely 3 years ago in 2019. That time, Zainab Ahmed gave an hint that the government might impose excise duty on these non-alcoholic beverages.

According to the minister, the action was to generate revenue to the country’s health care sector. Zainab also added the new development is part of the FG’s efforts to fight against diabetes and other health complications that is caused as a result of the consumption of these sugary drinks.

Moreover, before the development, the minister was not the only one in support of the motion – in short, the comptroller-general of the Nigeria Customs Service (NCS), Hameed Ali suggested that the federal government should introduce the duty on these carbonated beverages to reduce excess consumption.

Nonetheless, this action by the FG is driven towards ending excess consumption of sugary products. Earlier, excise duty was imposed on sugar; the move coupled to this latest development speaks in volumes the commitment of the government in tackling high sugar consumption.

The minister speaking to the media said:
“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.

“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.”