Nigeria's proposed amendment to the Customs, Excise Tariff, Etc. (Consolidation) Act would replace the existing ₦10 per litre specific excise duty on sugar-sweetened beverages with an ad valorem levy tied to the value or retail price of the products. The Senate passed the bill at Third Reading on 4 June 2026 and transmitted it to the House of Representatives for concurrence. As of the report date, the amendment had not been enacted into law.
The reform is framed around two policy goals: curbing excessive sugar consumption and raising additional revenue for healthcare and public-health programmes. Lawmakers have also indicated support for channelling part of the proceeds into health promotion, disease prevention, primary healthcare and health insurance for vulnerable Nigerians.
The proposed switch has significant fiscal and administrative implications. A specific duty of ₦10 per litre is relatively straightforward to administer because liability is calculated on the volume of beverages produced or imported. An ad valorem tax is more complex, requiring reliable valuation, pricing information, monitoring and enforcement across different products, manufacturers and distribution channels. Movements in retail prices would also affect tax liability, complicating compliance and revenue forecasting.
The change is being considered at a time when households and businesses are contending with elevated living costs, inflation, foreign-exchange pressures and weaker purchasing power. National Sugar Development Council data show total sugar consumption declined from about 1.72 million tonnes in 2022 to 1.44 million tonnes in 2023, a drop of roughly 16 per cent, while domestic sugar production fell from 46,479 tonnes to 30,053 tonnes, a decline of about 35 per cent. Apparent per-capita sugar consumption also fell from 8.4kg in 2022 to 7.1kg in 2023, equivalent to about 19.5g per person per day.
The beverage value chain, which spans manufacturing, sugar production and imports, packaging, transportation, distribution and retail, supports approximately 1.5 million direct and indirect jobs. A sizeable tax increase could therefore affect businesses beyond beverage manufacturers. The 2022 National Multidimensional Poverty Index found that 62.9 per cent of Nigerians, around 133 million people, were multidimensionally poor, underscoring the need to assess how higher prices would affect different income groups.
