Abuja begins sugar tax to beef up alcoholic and tobacco taxes
By Jeph Ajobaju, Chief Copy Editor
Abuja has begun taxing Coca Cola, Fanta, Mirinda, Sprite, Seven Up, and other non-alcoholic drinks at N10 per litre to raise N414 billion yearly tax generated in the sub sector which includes alcoholic and tobacco taxes.
The government says the sugar tax is meant to reduce consumption of sugar-sweetened beverages (SSBs) to fight non-communicable diseases but manufacturers see it as yet another levy and disincentive that may lead to job losses.
The tax was reintroduced in the Finance Bill signed into law by President Muhammadu Buhari on 31 December 2021 alongside the 2022 Appropriation Bill.
Dennis Ituma, Chief Superintendent of Customs, Department of Excise, Free Trade Zone and Industrial Incentives, confirmed the collection at a meeting in Abuja organised by the National Action on Sugar Reduction (NARR) to devise implementation of the tax and other schemes to reduce SSB consumption.
“The N10 per litre of Sugar-Sweetened Beverages has been implemented on June 1, by July 21, all excise duties must have been collected and paid into the Federation Account.
“It should interest you that taxation on SSBs was a policy of the federal government in 1984 but was stopped in January 2009,” Ituma said.
“Previously both SSBs, alcoholic drinks and tobacco were all taxed until 2009 when SSBs was removed from taxable beverages.
“Only alcoholic drinks and tobacco generates N414 billion, SSBs will further increase the revenue generated from drinks.”
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Customs officers deployed to factories
The Nigerian Customs Service (NIS) designates resident customs officers to all factories producing SSBs who take the measurements of all daily productions, Ituma added, per Nairametrics.
Musa Umar, an official of the Ministry of Finance Budget and National Planning, stressed the need to get those at the high level of policy-making involved in the advocacy to channel funds from the tax to health problems caused by excessive consumption of soft drinks.
Backstory
Abuja announced in January the introduction of an excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages as part of Finance Act 2022.
Finance Minister Zainab Ahmed disclosed this at the public presentation and breakdown of the 2022 budget on 5 January.
However, the Manufacturers Association of Nigeria (MAN) has asked the government not to introduce sugar tax, saying its revenue aspirations may not be justified in the long run.
