Nigerians kick back as Senate moves to raise soft drink taxes

Many Nigerians and economists are angry about the Senate’s plan to raise taxes on soft drinks and other non-alcoholic beverages.

The Senate Committee on Finance is pushing to change the current N10 per litre Sugar-Sweetened Beverage (SSB) tax into a percentage-based tax on the retail price. The bill, sponsored by Senator Ipalibo Harry Banigo, proposes that the extra revenue be used to fund the health sector.

However, different economic groups and experts strongly disagree with the plan.

The Centre for the Promotion of Private Enterprise (CPPE) warned that the new tax could force factories to close, increase the cost of drinks, and lead to many people losing their jobs.

Former President of the Chartered Institute of Bankers, Mazi Okechukwu Unegbu, also condemned the plan. He said Nigerians are already suffering from too many taxes and rising hardship. According to him, the government should suspend any plan to introduce new taxes because “they should not kill Nigerians with taxes everywhere.”

Public finance expert Prof. Godwin Oyedokun also warned that the tax increase would worsen the economic situation. He said soft drinks, energy drinks, and other flavored beverages are items many Nigerians buy every day because food prices are already too high.

He explained that the new tax would:

Immediately make drinks more expensive

Affect low-income earners, students, artisans, and families

Reduce sales for small shops, restaurants, and street vendors who rely on beverages to make daily income

Cause job losses in factories and distribution chains

Force manufacturers to cut production and staff

Prof. Oyedokun added that the government might not even earn as much revenue as expected because people will look for cheaper alternatives or buy from informal markets.

He also reminded the government that a similar tax was suspended in 2023 after complaints from manufacturers and labour unions. Bringing it back now, he said, creates uncertainty and sends the wrong message to investors.

He urged the government to look for better ways to raise money, such as widening the tax base, improving tax collection, and blocking leakages.

According to him, increasing the soft drink tax now would only punish consumers, small businesses, and workers already struggling in a tough economy.