The Organised Private Sector of Nigeria (OPS) has urged the National Assembly to withdraw the proposed amendment to the Customs, Excise and Tariff Bill, warning that the current draft is misaligned with the Federal Government’s fiscal reform agenda and could destabilise key non-oil industries.
The position was contained in a memo presented by the OPS during a public hearing on Thursday, November 27, 2025.
The amendment bill recently passed its second reading in the National Assembly.
OPS is made up of major private-sector groups including the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Manufacturers Association of Nigeria (MAN), Nigeria Employers’ Consultative Association (NECA), National Association of Small and Medium Enterprises (NASME), and the National Association of Small Scale Industrialists (NASSI).
‘Bill contradicts fiscal reforms’
According to the OPS, the proposed amendment introduces “mathematical, legal, and administrative contradictions” that could worsen Nigeria’s fragmented excise framework.
It argued that new levies are increasingly introduced without coordinated assessments of their combined impact on production, investment, employment, exports, inflation, and backward integration.
“The current draft of the bill is misaligned with the Federal Government’s fiscal reform direction and contains several legal and administrative gaps,” the group warned.
- OPS added that while the non-alcoholic drinks sector supports public health goals and government revenue, policies must be holistic and harmonised to avoid undermining jobs, affordability, or industrial stability.
- The private sector coalition cautioned that a steep excise increase or new levy, such as the one proposed in the bill, would impose significant economic costs on manufacturers and consumers without delivering measurable public health benefits.
- It noted that the beverage value chain, one of Nigeria’s most significant contributors to non-oil revenue, could be weakened. Rising operating costs, lower capacity utilisation, and higher retail prices could push more households into financial distress and shrink formal-sector activity.
“Nigeria’s non-alcoholic drinks sector is a critical economic stabiliser, supporting 1.5 million jobs, driving backward integration under the NSMP II, and contributing 40–45% of gross revenues as taxes, yet already operating under severe macroeconomic strain and thin margins,” the OPS said.
Industry operators also warned that the pressures could reduce VAT and Corporate Income Tax (CIT) receipts, ultimately shrinking medium-term FAAC allocations and weakening state-level revenue stability.
Concerns over lack of coordination with key fiscal institutions
OPS criticised the National Assembly for advancing the amendment without adequate engagement with the Ministry of Finance, the Presidential Fiscal Policy & Tax Reform Committee, FAAC, and other relevant institutions.
It argued that the bill contradicts President Bola Tinubu’s emphasis on stability, predictability, simplicity, and non-disruptive tax reform key priorities under the ongoing fiscal reset.
“The amendment bill contains internal contradictions (‘20% levy per litre of retail price’) that are impossible to implement consistently,” the group said.
- It added that excessive taxation may push consumers into informal markets, reduce formal-sector participation, and undermine government revenue targets.
- Citing global and domestic studies, the private sector emphasised that steep or ambiguous taxes on sugar-sweetened beverages (SSBs) in low-income economies tend to produce unintended consequences.
- These include job losses, MSME contraction, lower government revenue, wider inequality, and negligible health outcomes. OPS warned that Nigeria risks repeating these patterns if the amendment is passed in its current form.
Despite the concerns raised, the group said it remains open to working with legislators, fiscal authorities, and civil society to develop a more coherent excise framework.
What you should know
According to the sponsor of the Bill, Senator Ipalibo Harry Banigo (Rivers West), the amendment is designed to make Nigeria’s taxation system more responsive to the nation’s health needs by ensuring that part of the existing sugar-sweetened beverage (SSB) tax directly funds primary healthcare and preventive initiatives.
Banigo, a medical doctor and former Deputy Governor of Rivers State, said the proposal was “not a new tax, “but a strategy to “put existing revenues to better use in improving the wellbeing of Nigerians.”
She noted that excessive sugar consumption has become a major driver of non-communicable diseases (NCDs) such as diabetes, obesity, hypertension, and heart disease, which now account for more than 30 per cent of annual deaths in Nigeria.
