The Organized Private Sector of Nigeria (OPS) has urged the National Assembly to withdraw proposed amendments to the Customs, Excise and Tariff Bill.
OPS is made up of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Manufacturers Association of Nigeria (MAN), Nigerian Employers’ Consultative Association (NECA), National Association of Small and Medium Enterprises (NASME) and National Association of Small Scale Industrialists (NASSI).
They advocated for maintaining the current excise tax rates on non-alcoholic beverages (NAD), arguing that the current draft bill is not aligned with the Federal Government’s tax reform agenda and contains numerous legal and administrative deficiencies.
This position was presented by OPS during a public hearing on the proposed amendment bill, which recently passed its second reading in the National Assembly, on Thursday.
PAHO emphasized that the NAD sector is dedicated to supporting government revenue and public health objectives. However, they emphasized that policies must be holistic, harmonized and appropriate to the context, ensuring improvements in health outcomes without jeopardizing employment, investment, affordability or industrial stability.
PAHO noted that Nigeria’s excise tax framework is increasingly fragmented, with new taxes being introduced without a coordinated assessment of their combined impacts on production, investment, backward integration, employment, exports and inflation.
They warned that this could have unintended consequences that undermine President Tinubu’s key economic reforms without delivering measurable public health benefits.
They argued that a significant increase in excise taxes or the introduction of new levies would impose considerable economic costs on businesses and consumers without providing tangible public health benefits.
The group maintained that the proposed amendment introduces mathematical, legal and administrative contradictions, exacerbates Nigeria’s already fragmented fiscal environment and directly conflicts with national industrialization priorities, including Nigeria’s Sugar Master Plan.
OPS also warned that the amendment could weaken the beverage value chain, which is one of the country’s largest contributors to non-oil revenues and a major employer. Industry experts said the tax would increase operating costs, reduce production capacity and raise consumer prices at a time when households and small businesses are under considerable pressure and many are falling deeper into poverty. This could further reduce VAT and IS collection and add additional pressure to FAAC’s revenues in the medium term.
“Nigeria’s non-alcoholic beverage sector is a crucial economic stabilizer, supporting 1.5 million jobs, promoting backward integration under the NSMP II, and contributing 40-45% of gross revenues in the form of taxes, all while already operating under severe macroeconomic stress and tight margins,” PAHO said.
The group expressed concern that since the beverage industry is a key contributor to non-oil revenues, enacting the bill could undermine the administration’s goals of improving the ease of doing business during such a sensitive economic period.
They criticized the National Assembly for promoting these bills without coordination with the Ministry of Finance, the Presidential Committee on Fiscal Policy and Tax Reform, the FAAC and other relevant institutions.
Additionally, they noted that the bill contradicts the President’s focus on stability, predictability, simplicity and non-disruptive tax reform.
PAHO added that both global and national evidence shows that high or ambiguous taxes on sugar-sweetened beverages (SSB) in low-income economies lead to job losses, contraction of micro, small and medium-sized enterprises (MSMEs), reduced government revenue and few or no measurable health benefits, while widening inequality and favoring the growth of the informal market.
“The amendment bill contains internal contradictions, such as the proposed “20% tax per liter of retail price”, which are impossible to implement consistently.
Overtaxation can reduce the formal sector, reduce VAT and ISR collection and push consumers towards informal markets. Additionally, the bill may reduce FAAC distributions in the medium term and weaken revenue stability at the state level,” OPS added.
The group stated that they remain open to continued dialogue with legislators, tax agencies and civil society groups to ensure that any review of the excise tax regime supports investment, job creation and long-term income stability.