Senate Approves Price-based Tax On Sugary Drinks

The Senate has approved a major change to Nigeria’s sugar-sweetened beverage tax regime, replacing the existing flat excise duty of ₦10 per litre with a price-based levy.

The upper chamber also approved the creation of a dedicated health fund to support healthcare services and strengthen the fight against non-communicable diseases across the country.

Naija News reports that the approval followed the adoption of the report on the Customs, Excise Tariff (Amendment) Bill, presented by the Chairman of the Senate Committee on Finance, Senator Sani Musa, on behalf of the Joint Committee on Finance, Customs, Excise and Tariff.

Under the new framework approved by the Senate, the current volume-based tax of ₦10 per litre on sugar-sweetened beverages will be replaced with a percentage-based tax tied to retail prices.

The exact rate of the levy will be determined by the Minister of Finance, taking into account international best practices and prevailing economic realities.

The Senate noted that the existing flat-rate structure, which was introduced several years ago, had been weakened by inflation and had become less effective in discouraging excessive sugar consumption.

Lawmakers also observed that the old tax system no longer generated sufficient fiscal returns when compared with the rising public health concerns linked to sugary drinks.

As part of the amendment, the Senate approved the establishment of a dedicated health fund to be financed from a portion of revenues generated from the new levy.

The fund is expected to support disease prevention programmes, health promotion campaigns, primary healthcare delivery, and expanded health insurance coverage for vulnerable Nigerians.

According to the Senate, the funding mechanism will help ensure that revenue from the sugar-sweetened beverage tax is channelled directly into healthcare interventions that benefit the public.

The lawmakers also expressed concern over the increasing burden of non-communicable diseases in Nigeria, including diabetes, obesity, hypertension, and cardiovascular ailments.

They noted that many of these conditions have been linked to unhealthy dietary habits and the high consumption of sugary drinks.

The Senate said the new tax structure would not only improve revenue generation but also serve as a public health tool aimed at reducing excessive sugar intake among Nigerians.