GodswillAkpabio
The Senate on Wednesday approved a major overhaul of Nigeria’s sugar-sweetened beverage tax regime, replacing the existing flat-rate excise duty with a price-based levy and establishing a dedicated funding mechanism to support healthcare services and the fight against non-communicable diseases (NCDs).
The decision followed the adoption of the report on the Customs, Excise Tariff, etc. (Amendment) Bill, presented by the Chairman of the Senate Committee on Finance, Senator Sani Musa, on behalf of the Joint Committee on Finance and Customs, Excise and Tariff.
Under the new framework, the current excise duty of N10 per litre on sugar-sweetened beverages will give way to a percentage-based tax linked to retail prices. The exact rate will be determined by the Minister of Finance in accordance with international best practices and prevailing economic realities.
In a significant public health intervention, lawmakers also approved the creation of a dedicated health fund to be financed from a portion of revenues generated by the new levy. The fund will support disease prevention programmes, health promotion initiatives, primary healthcare delivery and expanded health insurance coverage for vulnerable Nigerians.
The Senate noted that the existing volume-based tax structure, introduced several years ago, has been weakened by inflation and no longer provides an effective deterrent against excessive sugar consumption or generates sufficient fiscal returns.
Lawmakers expressed concern over the growing burden of non-communicable diseases across the country, including diabetes, obesity, hypertension and cardiovascular ailments, many of which have been linked to unhealthy dietary habits and high intake of sugary drinks.
According to the Senate, Nigeria’s healthcare system continues to face chronic funding challenges, with millions of citizens relying heavily on out-of-pocket spending to access medical services. The lawmakers argued that health-related taxes offer a practical means of both influencing healthier consumer choices and generating additional resources for healthcare investments.
The Red Chamber further observed that the current tax model does not take into account the actual sugar content of beverages, thereby limiting incentives for manufacturers to reformulate products and reduce sugar levels.
Drawing from submissions received during the public hearing on the bill, the Senate noted that many stakeholders supported a shift to a percentage-based levy tied to product prices, describing it as a more sustainable and effective taxation model.
Lawmakers also pointed to international experiences in countries such as South Africa, Mexico and the United Kingdom, where sugar taxes have been credited with reducing consumption levels, encouraging product reformulation and improving public health outcomes.
The Senate referenced recommendations by the World Health Organisation, which advises that health-related taxes should increase the retail price of sugary products by at least 20 per cent to achieve meaningful changes in consumer behaviour.
Data presented to the National Assembly by the Nigeria Customs Service showed that the existing sugar-sweetened beverage tax generated more than N108.6 billion between 2022 and September 2025, reinforcing lawmakers’ confidence in the measure as a viable source of revenue.
While acknowledging concerns raised by manufacturers and other industry stakeholders over possible increases in production costs, job losses and higher consumer prices, the Senate maintained that the revised framework strikes a balance between economic interests and public health objectives.
Consequently, lawmakers directed the Minister of Finance to develop an appropriate levy structure that aligns with global standards while reflecting Nigeria’s economic and health priorities.
The Senate also called for stronger enforcement of excise tax collection, sustained engagement with industry stakeholders and complementary public health measures, including nutrition education campaigns, clearer food labelling requirements and responsible marketing practices.
The new tax regime is expected to form part of broader efforts by the Federal Government to tackle the rising burden of lifestyle-related diseases while strengthening long-term healthcare financing across the country.