A new Excise Duty has now been introduced in the Customs, Excise Tariffs, Etc. (Consolidation) Act on non-alcoholic, carbonated and sweetened beverages, at a specific rate of N10 per litre.
The definition (as well as the economic/ fiscal implications of this new Duty) is broad, as most soft drinks and even non-alcoholic wine are carbonated and sweetened.
Consumers of such drinks must also begin to anticipate increases in their retail prices.
The government says this Duty is levied to discourage Nigerians from excessive Sugar consumption. Do you agree with this opinion?
For us, there are no credible statistics to prove that the average Nigerian consumer of carbonated sweetened drinks suffers from excess blood-sugar based ailments, neither is there any established figure or statistic that points to carbonated sweetened drinks intake as the major cause (if any) of excess sugar consumption in Nigerians. There are several other factors too to consider, e.g demographics of carbonated sweetened drinks consumers in Nigeria; the fact that clean water is not available to every Nigerian and these carbonated drinks provide the necessary refreshments to quench thirst safely in the interim; the consideration that local sugar production and supplies is not even enough for the sugar needs of Nigerians and lastly, the possibility of regulating sugar contents in carbonated sweetened drinks, rather than imposing excise duty on it.
For further enquiries, discussion, advisory or help around complying with these new laws, please send us an email via clients@vi-m.com. You will be able to access all our explanatory write-ups on each of the major changes to the laws, brought about by the Finance Act 2021 and the practical ways in which they will affect taxpayers going forward, under our website group link – https://www.vi-m/category/Finance-Act-2021.