The Centre for the Promotion of Private Enterprise (CPPE) has urged the Senate Committee on Finance to withdraw its proposal to amend the Customs and Excise Act to increase excise duty on non-alcoholic beverages, warning that the measure is ill-timed and potentially harmful to Nigeria’s fragile economy.
In a statement issued on Monday by its CEO, Dr. Muda Yusuf, CPPE argued that imposing additional tax burdens on soft drink manufacturers is inconsistent with the nation’s current economic realities.
The group cautioned that the proposed excise hike would undermine economic recovery efforts, weaken the manufacturing sector, and place further strain on already distressed consumers.
“The current economic realities render the proposal counterproductive and potentially harmful to national economic recovery and the welfare of the people,” CPPE stated
Recently, the Senate proposed to amend the Customs and Excise Act for the purpose of increasing excise duty on non-alcoholic beverages.
“Fiscal measures must be carefully aligned with macroeconomic conditions”
In its statement, the CPPE insists such fiscal measures must be carefully aligned with broader macroeconomic conditions.
“Fiscal tools must remain flexible and responsive to prevailing macroeconomic conditions.
“Nigeria is currently navigating a fragile economic recovery pathway. The manufacturing sector, a vital engine of employment and growth, needs policies that support stability, competitiveness, and resilience,” the think tank stated.
According to CPPE, the beverage industry, which accounts for thousands of direct jobs and even more indirect ones, would face severe setbacks if the excise hike is implemented. Higher production costs, reduced profitability, factory closures, and possible layoffs are among the risks the group warns about.
“The proposed increase in excise duty on non-alcoholic beverages threatens to undermine these objectives, jeopardizing livelihoods, welfare, investment, and long-term industrial development,” the statement added.
The organisation emphasised that public health concerns should not be conflated with punitive taxation, noting that sustainable health interventions require education, consumer awareness, and proper regulation—not taxes that stifle business.
Backstory
Last week, the Senate passed the second reading of a bill proposing the restructuring of existing excise duty on sugar-sweetened beverages (SSBs) to fund health initiatives and infrastructure.
The bill, titled “A Bill to Amend the Customs, Excise Tariffs, Etc. (Consolidation) Act, to provide for the earmarking of Excise Duty on Non-Alcoholic, Carbonated or Sweetened Beverages for initiatives and infrastructure that improve the health of Nigerians, 2025 (SB. 713),” was sponsored by Senator Ipalibo Banigo (PDP, Rivers West).
