The federal government of Nigeria, through the Chief Superintendent of Customs, Department of Excise, Free Trade Zone and Industrial Incentives, Mr Dennis Ituma, has announced the implementation of a N10 per litre sugar tax on sugar-sweetened drinks.
Driving the news
The policy, which was signed into law by Nigeria’s President Muhammadu Buhari on December 31, 2021, alongside the 2022 Appropriation Bill, aims at reducing the spread of non-communicable diseases.
What they are saying
- According to the Customs Boss, Mr Dennis Ituma, the federal government started taxing Sugar-Sweetened Beverages (SSBs) from June 1st.
- Mr Ituma said “previously both SSBs, alcoholic drinks and tobacco were all taxed until 2009 when SSBs was removed from taxable beverages. “Only alcoholic drinks and tobacco generates N414 billion, SSBs will further increase the revenue generated from drinks.”
What this means
The increase of N10 per litre Sugar Tax of Sweetened Drinks would increase the overall cost of production of one bottle of carbonated drink. Therefore, to continue supplying to the Nigerian market, manufacturers would either reduce the size of carbonated drinks, or the amount of sugar per bottle, or increase the selling price of each bottle.
The big picture
About 54 countries in the world have successfully imposed tax on sugar-sweetened beverages till date. In countries like the UK, Mexico and South Africa, this policy reduced the consumption of sugar by SSBs.