Soft drinks to cost more as Customs insists on excise duty

The Nigeria Customs Service (NCS) has insisted on collecting excise duty on soft drinks, abolished in 1993 by the Chief Ernest Shonekan-led Interim National Government.

In October 2019, the Minister of Finance, Budget and National Planning, Zainab Ahmed, who is the Chairman of the Nigeria Customs Service Board, had said that the Federal Government was considering introducing excise duties on carbonated drinks as part of its revenue generation drive. 

Appearing before a joint committee of the Senate on Finance and National Planning on Thursday, the Comptroller-General of Customs, Hameed Ali, said the Federal Government should lift the tax waivers for companies producing soft drinks within the country.

Ali argued that if companies producing alcoholic beverages and tobacco could pay taxes, those producing soft drinks could do the same.

“We have been pushing for the expansion of our own excise collection. During the Shonekan regime, excise was stopped for carbonated drinks manufacturers, like Coca-Cola. The only one approved for us are tobacco alcoholic beverages. The understanding then was that tobacco and alcoholic beverages affect the health of citizens and should be taxed. But we know that carbonated drinks are also injurious to the health of the people due to the high sugar content.

“Therefore if tobacco and alcoholic beverages companies are paying tax, the carbonated drink manufacturers should also pay,” he said. 

Ali also informed the lawmakers that revenue from import would reduce because of a number of agreements Nigeria has signed.

He said Customs would generate N1.2 trillion before the end of the year because it had already collected N830 billion as of the end of July.

Also speaking at the event, Senate President Ahmad Lawan said, “I don’t understand why Coca-cola for instance should not pay excise. It is an established company all over the world and it dominates the soft drinks industry,” he said.