Coca-Cola, Bigi, Others To Cost More as FG Imposes N10/litre ‘Sugar Tax’ on Carbonated Drinks

The Federal Government has introduced an excise duty of N10/litre on all non-alcoholic, carbonated and sweetened beverages.

Excise duty is a form of tax imposed on the production, licensing and sale of goods.

Zainab Ahmed, minister of finance, budget and national planning, said this during the public presentation of the 2022 Appropriation Act on Wednesday 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, Hameed Ali, comptroller-general of the Nigeria Customs Service (NCS), 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 sugar beverages which contributes to diabetes, obesity among others.

However, checks showed that there are other sources of sugar intake, including 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 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.”