Nigeria’s Organized Private Sector (OPSN) has urged the Federal Government to withdraw the proposed amendment to the Customs, Excise and Tariff Bill, cautioning that the move could derail President Bola Tinubu’s fiscal reform plans and deepen the country’s already fragmented tax landscape. The OPSN—which comprises key bodies such as the Manufacturers Association of Nigeria, the National Association of Small and Medium Enterprises, and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture—called on the National Assembly to retain existing excise duties on non-alcoholic beverages.
During Thursday’s public hearing, the OPSN argued that the proposed changes contain major legal, mathematical, and administrative flaws. It maintained that although the non-alcoholic drinks industry contributes significantly to government earnings and public health initiatives, any modification to tax policies must be comprehensive, context-sensitive, and aligned with national industrial goals to prevent damaging economic outcomes.
The group further expressed concern that Nigeria’s excise system is becoming increasingly disjointed, with new taxes introduced without coordinated analysis of their implications for production, investment levels, backward integration, job creation, exports, and inflation. According to the OPSN, a sharp rise in excise duties or the introduction of an entirely new levy could escalate operating costs, reduce factory utilisation, and force up consumer prices at a time when households and small enterprises are already stretched financially. Such policy decisions, it warned, could ultimately reduce Value Added Tax and Company Income Tax inflows, placing additional pressure on revenues shared through the Federation Account.
Emphasising the importance of the non-alcoholic beverages industry, the OPSN noted that it sustains 1.5 million jobs, promotes backward integration under the Nigeria Sugar Master Plan II, and generates roughly 40 to 45 per cent of total tax receipts. It added that the sector already faces tight margins and challenging macroeconomic conditions. Imposing an extra levy, the group cautioned, could weaken the beverage value chain—one of Nigeria’s strongest sources of non-oil revenue—and directly undermine the government’s industrialisation and ease-of-doing-business goals.
The OPSN also criticised the National Assembly for pushing the bill forward without proper alignment with key fiscal institutions, including the Ministry of Finance, the Presidential Fiscal Policy and Tax Reform Committee, and the Federation Account Allocation Committee. It stressed that tax policies must be predictable, straightforward, and minimally disruptive to ensure economic stability and sustain investor trust.
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Drawing from both global and local insights, the OPSN noted that steep or unclear Sugar-Sweetened Beverage (SSB) taxes in low-income countries often lead to job losses, MSME shrinkage, revenue reduction, expansion of informal markets, and higher inequality—without delivering measurable public health improvements. The group pointed out that the current proposal, which introduces a 20 per cent levy per litre based on retail pricing, contains internal inconsistencies that would make its application unmanageable.
While the OPSN expressed willingness to engage with lawmakers, fiscal policymakers, and civil society groups to improve the excise framework, it insisted that any reforms must protect investment, employment, and long-term revenue stability.
Meanwhile, advocacy organisations such as Corporate Accountability and Public Participation Africa (CAPPA) have intensified calls for a substantial increase in the SSB tax—from N10 to N130 per litre—as a strategy to curb noncommunicable diseases. CAPPA argues that a 1,200 per cent hike would significantly cut sugar consumption and related health risks. However, the OPSN warned that such drastic taxation could destabilise the formal beverage industry.
This growing dispute underscores the delicate balance between advancing public health goals and safeguarding economic stability, with Nigeria’s MSMEs situated at the heart of the conversation. The government’s approach to reconciling these competing priorities will influence the future of the non-alcoholic drinks sector, the steadiness of national tax revenues, and the protection of millions of livelihoods across the country.
