President Muhammad Buhari signed the finance Act on December 31, 2021. It was stated in the act that there would be an N10 per litre sugar tax. The federal government has passed this act to fight non-infectious diseases. Thus there would be an increase in the price of carbonated drinks and beverages.
National Action on Sugar Reduction (NASR) organised an event that aimed to discuss tax and the consumption of sugar-related beverages. Dennis Ituma spoke at this event and said the law was implemented on June 1.
Talking to the press, Ituma said, “The N10 per litre of Sugar-Sweetened Beverages has been implemented on June 1, by July 21, all excise duties must have been collected and paid into the federation account.
He explained, “It should interest you that taxation on SSBs was a policy of the Federal Government in 1984 but was stopped in January 2009.
“Previously, both SSBs, alcoholic drinks, and tobacco were taxed until 2009, when SSBs were removed from taxable beverages. He added.
“Only alcoholic drinks and tobacco generate N414 billion, SSBs will further increase the revenue generated from drinks.” He further added.
The federal government was hell-bent on implementing this issue, given the fact that it had gotten requests from a lot of the companies that wanted the sugar tax to be stripped off.
The main purpose behind this tax is to discourage people from consuming cold drinks, as cold drinks are rich in sugar. The overconsumption of these cold drinks can cause negative health impacts and illness. So the government has passed these laws, which have made cold drinks expensive. Due to inflation, hardly anyone will be now be buying these cold drinks. This will have a negative impact on beverage companies and their business. As fewer people will buy their beverages.