Organised Private Sector Warns FG Against Proposed Excise Amendment, Says Bill Threatens Fiscal Reforms

Organised Private Sector Warns FG Against Proposed Excise Amendment, Says Bill Threatens Fiscal Reforms

Members of the Organised Private Sector of Nigeria (OPSN) have urged the Federal Government to withdraw its proposed amendment to the Customs, Excise and Tariff Bill, cautioning that the move could derail President Bola Tinubu’s fiscal reform agenda and worsen the already fragmented tax environment.

The OPSN—which includes NACCIMA, MAN, NECA, NASME, and NASSI—made the appeal during a public hearing on Thursday. The coalition insisted that lawmakers should retain the current excise rates on non-alcoholic beverages, stressing that the proposed changes are inconsistent with Nigeria’s broader reform direction.

In its formal submission, the group warned that the amendment was “misaligned with the Federal Government’s fiscal reform direction and contains several legal and administrative gaps.” It noted that while non-alcoholic drinks contribute to revenue and public health objectives, any excise policy must be holistic, coherent and economically realistic to avoid destabilising the sector.

OPSN Flags Fragmented Excise Regime, Possible Economic Fallout

The private sector coalition raised concerns that Nigeria’s excise framework has become increasingly disjointed as government agencies introduce new levies without assessing their collective impact on production, investment, backward integration, employment, exports, and inflation.

According to OPSN, introducing steep excise increases—or an entirely new levy—would impose significant costs on manufacturers and consumers without delivering proven public health benefits. The group further described the amendment as containing “mathematical, legal and administrative contradictions,” warning that it conflicts with the Nigeria Sugar Master Plan and broader industrialisation policies.

The coalition highlighted the risk of damaging the beverage value chain, which it identified as a major non-oil revenue contributor and one of Nigeria’s largest employers. An excise hike, it said, would increase production costs, reduce factory output, and push retail prices upward at a time when Nigerians and small businesses are already struggling.

OPSN warned that the resulting slowdown could weaken VAT and Company Income Tax collections, thereby affecting medium-term FAAC revenue stability.

Non-Alcoholic Drinks Sector Under Pressure

The group reminded lawmakers that the industry:

• Supports 1.5 million jobs
• Drives backward integration under NSMP II
• Contributes 40–45% of gross revenues as taxes
• Operates under “severe macroeconomic strain and very thin margins”

Given this context, OPSN argued that altering the excise regime now could undermine the government’s ease-of-doing-business goals during a sensitive economic period.

Bill Criticised for Lack of Institutional Coordination

The OPSN also faulted the National Assembly for advancing the amendment without collaborating with the Ministry of Finance, the Presidential Fiscal Policy & Tax Reform Committee, FAAC, or other relevant institutions.
This, they said, contradicts President Tinubu’s commitment to stability, predictability, and non-disruptive tax policy.

The group drew attention to global evidence showing that aggressive or poorly designed Sugar-Sweetened Beverage (SSB) taxes in low-income countries tend to:

• Trigger job losses
• Shrink MSMEs
• Reduce formal-sector revenue
• Fail to deliver measurable health gains
• Boost informal market activity
• Exacerbate inequality

The OPSN also flagged ambiguous provisions in the bill, including the proposal of a “20 per cent levy per litre of retail price,” which it said is impossible to implement uniformly.

Open to Further Dialogue

Despite its objections, the OPSN affirmed its willingness to continue working with lawmakers, fiscal authorities, and civil society to craft excise policies that balance public health goals with sustainable investment and long-term revenue stability.

Meanwhile, The PUNCH earlier reported that Corporate Accountability and Public Participation Africa (CAPPA) and allied groups have renewed calls for a drastic increase in the SSB tax from ₦10 to ₦130 per litre, insisting that a steep hike is necessary to reduce noncommunicable diseases.

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