A proposed increase in excise duty on non‑alcoholic beverages in Nigeria has sparked widespread criticism from economists and citizens alike. The Senate Committee on Finance is seeking to amend the existing tax, which currently stands at a fixed N10 per litre, to a percentage‑based levy on the retail price. Sponsored by Senator Ipalibo Harry Banigo, the amendment bill aims to channel the additional revenue into the health sector.
However, experts warn that the move could trigger factory shutdowns, price hikes, and massive layoffs. The Centre for the Promotion of Private Enterprise has urged the Senate to abandon the plan, citing its potential negative impact on the economy. Mazi Okechukwu Unegbu, a former president of the Chartered Institute of Bankers, also condemned the proposal, noting that Nigerians are already burdened by multiple taxes and hardship.
Economist and public‑finance expert Prof. Godwin Oyedokun cautioned that the tax hike could worsen inflation, cripple small businesses, and undermine household incomes. He argued that the economic repercussions are far‑reaching and may outweigh the government’s expected revenue gains. An immediate rise in retail prices would affect low‑income earners, students, and families with children, while small enterprises such as roadside retailers and neighborhood shops could see demand fall and daily earnings shrink.
Oyedokun further expressed concern about potential job losses in the beverage value chain, which employs thousands of workers. He questioned the premise that the tax would significantly boost government revenue, pointing out that consumers might respond to higher prices by switching to cheaper alternatives or reducing consumption. The timing of the proposal has also drawn criticism, as Nigerians already face record inflation, high transport costs, and eroding purchasing power.
The economist urged the government to consider alternative fiscal measures, such as expanding the tax net, improving tax administration, and supporting sectors that generate large‑scale employment. As the debate continues, it remains to be seen whether the government will heed experts’ warnings and reconsider the proposed tax hike.
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