Nigeria Senate approves new sugar-sweetened beverage tax  

NIGERIA – Nigeria’s Senate has approved a new excise duty framework for sugar-sweetened beverages (SSBs), replacing the existing flat-rate levy with a retail price-linked tax designed to reduce sugar consumption, improve public health outcomes, and generate additional revenue for healthcare programmes. 

The decision followed the adoption of the report on the Customs, Excise Tariff, etc. (Amendment) Bill presented by the Joint Committee on Finance and Customs, Excise and Tariff. 

Under the new framework, the current excise duty of N10 per litre on sugar-sweetened beverages will be replaced by a percentage-based levy tied to retail prices. The specific rate will be determined by the Minister of Finance in accordance with international best practices. 

Lawmakers also approved the allocation of a portion of the revenue generated from the tax to support health promotion initiatives, disease prevention programmes, primary healthcare services, and health insurance coverage for vulnerable populations. 

According to the committee, the existing tax structure has become less effective due to inflation and no longer serves as a sufficient deterrent to excessive consumption of sugary drinks. 

“The current excise duty of N10 per litre on sugar-sweetened beverages has been significantly eroded by inflation and is too low to effectively discourage excessive consumption or generate substantial revenue,” the committee stated. 

The Senate noted that rising cases of non-communicable diseases, including diabetes, obesity, hypertension, and cardiovascular diseases, have heightened the need for stronger public health interventions. Lawmakers linked the growing prevalence of these conditions to high sugar intake and unhealthy dietary patterns. 

According to the committee, health-related excise taxes can serve a dual purpose by reducing the consumption of products associated with health risks while providing governments with additional resources to strengthen healthcare systems. 

The Senate also expressed concern that Nigeria’s healthcare sector remains underfunded and heavily dependent on out-of-pocket spending, limiting access to essential medical services for many citizens. 

Lawmakers argued that a retail-price-based tax would provide a more sustainable and effective framework than the current volume-based system.  

The committee observed that the existing structure does not adequately account for sugar content in beverages and offers little incentive for manufacturers to reduce sugar levels in their products. 

Stakeholders who participated in the public hearing on the bill reportedly supported the shift to a price-based levy, citing its potential to improve both public health and fiscal outcomes. 

The committee further referenced experiences from South Africa, Mexico, and the United Kingdom, where sugar-sweetened beverage taxes have contributed to lower consumption levels and improved health outcomes.  

It also cited recommendations from the World Health Organization, which indicate that health-related taxes should increase retail prices by at least 20 percent to significantly influence consumer behaviour and encourage healthier choices. 

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