The planned N10 naira per litre tax on sweetened and non-alcoholic beverages (Sugar Tax) as part of its recent Domestic Revenue Mobilisation may see an increase in the retail cost of beverages by 5%.
This was disclosed by Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader, PwC, at the Nigerian Economic Outlook 2022 organised by the King Court parish of the RCCG, in a webinar themed “The Finance Act for 2022- Nigeria Fiscal Guide.”
He warned that the tax increase comes at a time the industry is recovering from shocks to its value chain
What Oyedele is saying
Oyedele stated that the newer changes to the Finance Act include an imposition of excise duty of N10 per litre on non-alcoholic, carbonated and sweetened beverages.
“The objective is to discourage excessive consumptions of sugar and to raise revenue for the government,” he said
He stated that implications are wide, as the policy does not seem to have sufficiently been considered towards Nigeria’s manufacturing local context.
He also warned that the increase could translate to an increase in the retail price of products by up to 5%. He also stated that lower-end products are expected to bear the brunt, as the industry is still recovering from issues with its value chain.
In case you missed it
Recall that the Federal Government through the Minister of Finance, Budget and Planning, Zainab Ahmed announced the introduction of excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages in the country.
Nairametrics reported earlier that the Manufacturers Association of Nigeria had called on the FG to halt the planned N10 naira per litre tax on sweetened and non-alcoholic beverages.