Federal Government imposes new tax on carbonated drinks, others

Federal Government imposes new tax on carbonated drinks, others 2

An excise duty of N10 per litre will now be charged on all non-alcoholic, carbonated and sweetened beverages, finance minister Zainab Ahmed has announced.

Ms Ahmed on Wednesday disclosed this at the public presentation and breakdown of the 2022 budget in Abuja.


The minister asserted that the charge on beverages is a new policy introduced in the Finance Act signed into law by President Muhammadu Buhari on December 31, 2021 alongside the 2022 Appropriation Bill.

The National Assembly raised the total 2022 budget figure from the proposed N16.391 trillion to N17.126 trillion.


The budget was passed with the crude oil benchmark increased from $57 per barrel to $62 per barrel.

Ms Ahmed said the new ‘Sugar Tax’ was introduced to raise excise duties and revenues for health related and other critical expenditures in line with the 2022 budget priorities.

She also said it was aimed at discouraging excessive consumption of sugar in beverages, which contributed to diabetes, obesity and other diseases.

A coalition of non-governmental organisations, National Action on Sugar Reduction, had in the past months been advocating for an imposition of special taxes on sugar sweetened beverages.


The group hinged its call on health risks associated with sugary drinks and the cost of treatment.

Ms Ahmed added that the Finance Act also raised excise duties and revenues for the health sector.

Also under the Act, she said provision was made to reinforce the Federal Inland Revenue Service’s (FIRS) mandate as the principal tax collection agency while collaborating with other law enforcement Ministries, Departments and Agencies (MDAs).

On independent revenue collection, Ahmed said as at November 2021, the federal government generated N1.04 trillion, surpassing its N973.41 billion target.


She also said to further enhance independent revenue collection, the federal government aimed to optimise the operational efficiencies and revenue focus of Government Owned Enterprises (GOEs).

Speaking on critical sectoral allocations of the 2022 budget, Ms Ahmed said the education sector got N1.234 trillion with 815.69 billion allocated to the Ministry of Education and its agencies for recurrent and capital expenditure.

She said N112.29 billion was allocated for Universal Basic Education Commission (UBEC), while N306 billion was allocated for Tertiary Education Trust Fund (TETFUND) for infrastructure projects in tertiary institutions.

The health sector, which got N876.38 billion as 5.1 per cent of the total budget, had N770.87 billion go to the Ministry of Health and its agencies for recurrent and capital expenditure including hazard allowance.


Ms Ahmed said the 2022 budget was expected to further accelerate the recovery of the nation’s economy, facilitate the completion of critical projects and improve the general living conditions of the people.

She added that the budget reflected the key execution priorities and strategies of the National Development Plan (NDP) 2021-2025.

Government will continue to create the enabling environment for the private sector to increase their investment and contribute significantly to job creation, economic growth and lifting millions of our citizens out of poverty.

“Early passage of the 2022 budget for implementation from Jan. 1, will significantly contribute towards achieving the government’s macro-fiscal and sectoral objectives,” said the minister.