A wave of criticism has greeted the Nigerian Senate’s plan to increase excise duties on non-alcoholic beverages, with economists and citizens warning that the move could deepen economic hardship.
The Senate Committee on Finance has proposed amending the Sugar-Sweetened Beverage (SSB) tax—currently a fixed N10 per liter under the Customs and Excise Tariffs (Consolidation) Act—into a percentage-based levy on retail prices. Sponsored by Senator Ipalibo Harry Banigo, the bill intends to channel revenue from the higher tax into the health sector.
But the proposal has drawn intense pushback. The Centre for the Promotion of Private Enterprise (CPPE) urged the Senate to halt the plan, warning it could trigger factory closures, price hikes, and massive layoffs.
Similarly, former Chartered Institute of Bankers president Mazi Okechukwu Unegbu said Nigerians are already struggling under multiple taxes and economic hardship. “The government should not kill Nigerians with taxes all over the place. They should be reasonable in their proposals,” he said, calling for a suspension of any new tax measures.
Economist and public finance expert Prof. Godwin Oyedokun echoed these concerns, warning that the tax hike could worsen inflation, strain household incomes, and cripple small businesses. He said the measure would disproportionately affect millions of Nigerians who rely on affordable soft drinks, flavored beverages, and energy drinks as everyday staples.
“The immediate impact would be higher retail prices, hitting low-income earners, students, artisans, and families the hardest,” Oyedokun noted. He added that small businesses—including roadside vendors, restaurants, and neighborhood shops—could see reduced sales, jeopardizing livelihoods and employment along the beverage supply chain.
Oyedokun also questioned the revenue rationale behind the proposal, pointing out that consumers often shift to cheaper or informal alternatives in response to price hikes, potentially undermining projected government gains. He described the timing of the tax increase as “misaligned with current economic realities,” with Nigerians already facing record inflation, rising energy costs, and shrinking purchasing power.
Highlighting policy inconsistency, Oyedokun recalled that similar excise duties were suspended in 2023 after objections from manufacturers and labor groups. “A fresh attempt sends negative signals to investors who rely on stable policies,” he said, urging the government to explore alternatives like broadening the tax base, improving administration, and supporting job-creating sectors.
“In summary, while boosting revenue is understandable, the social and economic costs of this excise duty hike appear far heavier than the benefits,” Oyedokun concluded.
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