…says proposed soft drink tax hike ‘economically disruptive’
…reduced government revenue due to declining consumption
The Centre for the Promotion of Private Enterprise (CPPE) has raised strong objections to a proposal by the Senate Committee on Finance seeking amendments to the Customs and Excise Act to increase excise duty on non-alcoholic beverages.
In a statement issued by Muda Yusuf, its Director and Chief Executive Officer, the organisation described the proposal as “economically disruptive, socially harmful, procedurally flawed, and inconsistent with Nigeria’s development objectives,” warning that the move could further destabilise an already fragile manufacturing sector.
Yusuf noted that manufacturers, SMEs, distributors, and retailers are currently struggling under intense macroeconomic pressures, including inflation, high energy costs, foreign exchange volatility, escalating input prices, and weakened consumer purchasing power.
He said the non-alcoholic beverage industry has suffered multiple tax adjustments in recent years, resulting in price increases of up to 200–300 percent.
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“Many operators, especially small and medium-scale enterprises are barely staying afloat. A new wave of excise increases will weaken their capacity, reduce output, erode consumer demand, and lead to avoidable job losses. The economy cannot withstand another round of factory closures,” Yusuf warned.
The CPPE also highlighted broader economic and social risks, including the potential for higher living costs for millions of households, reduced government revenue due to declining consumption, and increased pressure on small businesses involved in the beverage value chain.
On governance concerns, the Centre faulted the procedural approach behind the proposal, noting that excise tax policy falls under the jurisdiction of the Minister of Finance, yet the initiative appears to be driven by the Senate Committee on Finance and the Minister of Health.
It added that key committees, including those on Industry, Customs, and Trade and Investment were not adequately consulted.
“This lack of coordination sends negative signals to domestic and foreign investors and undermines the coherence of Nigeria’s fiscal policy architecture,” the CPPE said.
While acknowledging public health concerns around excessive sugar consumption, the Centre argued that singling out soft drinks for higher taxes is narrow and inequitable, as sugar intake comes from multiple food categories.
Instead, it recommended broader strategies such as nationwide nutritional education, improved food labelling, and support for lifestyle and physical activity campaigns.
After consultations with economic experts and industry stakeholders, the CPPE called for an immediate discontinuation of the proposed excise increase. It stressed that excise rate-setting should remain an administrative function to ensure flexibility, while urging the government to strengthen collaboration with manufacturers on voluntary sugar reduction and health-conscious product innovations.
The Centre urged the Senate Committee on Finance to reconsider the implications of the proposal, advised the Presidency and Ministry of Finance to reaffirm executive authority over excise policy, and called on the Ministry of Health to adopt non-tax public health interventions.
According to Yusuf, Nigeria’s economic recovery requires policies that promote stability and competitiveness, not measures that threaten livelihoods and investment.
