New excise bill could undermine Tinubu’s fiscal reform agenda, organised private sector warns
OPS said the current draft is misaligned with the federal government’s fiscal reform direction and contains several legal and administrative gaps.
The organised private aector of Nigeria (OPS), comprising the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the Manufacturers Association of Nigeria (MAN), the Nigeria Employers’ Consultative Association (NECA), the National Association of Small and Medium Enterprises (NASME), and the National Association of Small Scale Industrialists (NASSI), has urged the National Assembly to withdraw the proposed amendment to the customs, excise and tariff bill.
OPS said the current draft is misaligned with the federal government’s fiscal reform direction and contains several legal and administrative gaps.
The position was presented in a paper submitted by OPS on Thursday, during the public hearing on the bill, which recently passed its second reading in the national assembly.
The group explained that the non-alcoholic drinks (NAD) sector is committed to supporting government revenue and public health objectives, but stressed that policies must be holistic, harmonised, and context-appropriate, ensuring they improve health outcomes without undermining jobs, investment, affordability, or industrial stability.
OPS warned that Nigeria’s excise framework is increasingly fragmented, with new levies introduced without a coordinated assessment of their combined effects on production, investment, backward integration, employment, exports, and inflation.
Such uncoordinated policies, the group said, could undermine President Tinubu’s economic reforms without delivering measurable public health gains.
The group said a steep excise increase or new levy would impose significant economic costs on businesses and consumers while providing little to no public health benefit.
OPS also highlighted that the proposed excise amendment contains mathematical, legal, and administrative contradictions, worsens Nigeria’s fragmented fiscal environment, and conflicts with national industrialisation priorities, including the Nigeria Sugar Master Plan.
OPS further warned that the amendment could weaken the beverage value chain, one of Nigeria’s largest contributors to non-oil revenue and a major employer.
The group said the levy would increase operating costs, reduce capacity utilisation, and raise consumer prices, at a time when households and small businesses are already under economic pressure.
This, they added, could reduce VAT and CIT collections and place additional strain on medium-term FAAC revenues.
“Nigeria’s non-alcoholic drinks sector is a critical economic stabiliser, supporting 1.5 million jobs, driving backward integration under the NSMP II, and contributing 40–45% of gross revenues as taxes, yet already operating under severe macroeconomic strain and thin margins,” OPS said.
The group noted that as a key non-oil revenue contributor, the beverage industry’s stability is vital for the administration’s ease-of-doing-business objectives.
OPS criticised the national assembly for advancing the bill without coordination with the ministry of finance, the presidential fiscal policy and tax reform committee, FAAC, and other relevant institutions, saying it contradicts the President’s emphasis on stability, predictability, simplicity, and non-disruptive tax reform.
OPS cited evidence showing that steep or ambiguous sugar-sweetened beverage (SSB) taxes in low-income economies often lead to job losses, MSME contraction, reduced government revenue, no measurable health gains, widening inequality, and growth of the informal market.
“The amendment bill contains internal contradictions (‘20% levy per litre of retail price’) that are impossible to implement consistently,” the group added.
Over-taxation may shrink the formal sector, reduce VAT and CIT collections, and shift consumers to informal markets. The bill may cut medium-term FAAC distributions and weaken state-level revenue stability.”
OPS concluded by stating that it remains open to engagement with lawmakers, fiscal agencies, and civil society groups to ensure that any revision to the excise regime supports investment, jobs, and long-term revenue stability.
