Onome Amuge
The Organized Private Sector of Nigeria (OPS) has raised concerns over a proposed amendment to the Customs, Excise, and Tariff Act, warning that excise increases on non-alcoholic drinks (NADs) could destabilise one of the country’s most important industrial sectors, undermine government revenue, and threaten jobs at a time when Nigeria’s economy remains under severe strain.
In a position paper submitted on Thursday, November 27, 2025, during a National Assembly public hearing on the bill, OPS, an umbrella body representing the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the Manufacturers Association of Nigeria (MAN), the Nigeria Employers’ Consultative Association (NECA), the National Association of Small and Medium Enterprises (NASME), and the National Association of Small Scale Industrialists (NASSI), called for the withdrawal of the draft amendment and the maintenance of current excise rates.
The group argued that the bill, which recently passed its second reading, is misaligned with the federal government’s fiscal reform agenda. According to OPS, it contains multiple legal and administrative gaps that could produce unintended consequences for production, investment, employment, and inflation.
“Nigeria’s non-alcoholic drinks sector is a critical economic stabiliser, supporting 1.5 million jobs, driving backward integration under the Nigeria Sugar Master Plan (NSMP II), and contributing 40 to 45 percent of gross revenues as taxes. Yet the industry is already operating under severe macroeconomic strain and razor-thin margins,” OPS said in the paper.
The organisation warned that introducing a steep levy or raising excise duties without holistic assessment could impose economic costs on both businesses and consumers, with little to no measurable public health benefits. OPS emphasised that fiscal policies affecting the sector must be harmonised, context-appropriate, and designed to achieve health outcomes without undermining industrial stability or affordability.
Industry analysts echoed the concerns, highlighting that higher excise rates would drive up operating costs, reduce capacity utilisation, and increase consumer prices at a time when households and small businesses are struggling. These pressures, they note, could ultimately erode Value Added Tax (VAT) and Companies Income Tax (CIT) collections, and reduce medium-term Federation Account Allocation Committee (FAAC) revenues, undermining both federal and state fiscal stability.
OPS further criticised the National Assembly for advancing the bill without proper coordination with the Ministry of Finance, the Presidential Fiscal Policy & Tax Reform Committee, FAAC, and other relevant institutions. According to the group, the bill contradicts President Bola Tinubu’s policy emphasis on stability, predictability, simplicity, and non-disruptive tax reforms.
The group also highlighted structural issues within the bill, pointing out that the proposed 20 per cent levy per litre of retail price creates internal contradictions that are administratively impossible to implement consistently. They argued that over-taxation could shrink the formal sector, push consumers toward the informal market, and aggravate inequality while undermining long-term revenue stability.
Global and domestic evidence, OPS noted, supports the notion that steep or ambiguous taxes on sugary beverages in low-income economies often result in job losses, contraction of micro, small, and medium enterprises (MSMEs), and reduced government revenue, without producing measurable public health gains.
Despite their objections, OPS reiterated its willingness to engage with lawmakers, fiscal authorities, and civil society groups to ensure that any future revisions to the excise framework align with industrialisation priorities, protect investment, and safeguard employment.
“The non-alcoholic drinks sector is among Nigeria’s key non-oil revenue contributors. Any legislation that undermines this sector risks weakening backward integration efforts, reducing tax collections, and slowing industrial growth. Thoughtful engagement and careful policy design are essential to balancing public health objectives with economic sustainability,” OPS stressed.
