The National Union of Food, Beverage and Tobacco Employees (NUFBTE) has urged the House of Representatives to reject the proposed amendment to Nigeria’s soft drinks tax, warning that it could lead to factory closures, job losses and further challenges for the manufacturing sector.
The appeal was contained in an open letter addressed to the Speaker of the House of Representatives, Tajudeen Abbas, and co-signed by the union’s President, Garba Dankama.
The proposed legislation, known as the Customs, Excise Tariff, etc. (Consolidation) Act (Amendment) Bill, 2025, passed its third reading in the Senate on June 4, 2026, and is currently awaiting concurrence by the House of Representatives.
Union warns of factory closures
Dankama expressed concern over the deteriorating operating conditions in Nigeria’s manufacturing sector, noting that high borrowing costs, rising energy and logistics expenses, foreign exchange constraints and declining consumer purchasing power have forced several manufacturers to scale back production or shut down operations.
He warned that introducing an additional tax burden on the non-alcoholic drinks (NAD) sector could worsen the situation, given its extensive linkages with agriculture, transportation, distribution and retail.
- “The NAD sector, which anchors hundreds of thousands of jobs across farming, haulage, distribution, and retail, cannot absorb an additional tax escalation without triggering a wave of further closures, retrenchments, and value chain collapse,” he stated.
The union president also questioned the potential public health benefits of the proposed tax, arguing that soft drinks account for a relatively small proportion of Nigerians’ total sugar consumption.
He maintained that increasing taxes on the products could encourage consumers to switch to cheaper, unregulated alternatives while threatening employment across the industry’s value chain.
- “Taxing a product category that contributes only 5% of national sugar intake will not yield real public health benefits. It will simply push consumers toward cheaper, unregulated alternatives, while destroying the livelihoods of over a million Nigerians who have already borne the brunt of recent economic reforms,” he added.
Dankama further argued that workers’ earnings have failed to keep pace with rising transportation, food and housing costs following the Federal Government’s fuel subsidy removal and foreign exchange reforms.
Proposed bill targets soft drinks taxation
The Customs, Excise Tariff, etc. (Consolidation) Act (Amendment) Bill, 2025, seeks to replace the existing fixed excise duty of N10 per litre on sugar-sweetened beverages with a percentage-based levy calculated on their retail prices.
- Under the proposed framework, the tax would no longer depend solely on the volume of beverages produced but would also reflect their retail value, with the applicable rate determined by the Minister of Finance.
- The bill proposes allocating part of the revenue generated to public health interventions, including disease prevention, health promotion and primary healthcare services.
It also seeks to provide funding for health insurance coverage for vulnerable Nigerians.
- However, manufacturers and other business stakeholders have opposed the proposal over concerns about its potential impact on production costs, investment and consumer prices.
In exclusive interviews with Nairametrics, industry stakeholders, including the Abuja Chamber of Commerce and Industry (ACCI), the Nigeria Employers’ Consultative Association (NECA) and the Manufacturers Association of Nigeria (MAN), raised concerns about the proposed changes.
They argued that replacing the existing fixed levy with a percentage-based tax could increase production costs, discourage investment and place additional pressure on manufacturers already facing difficult operating conditions.
Rising disease burden drives tax proposal
The proposed amendment to Nigeria’s soft drinks tax is aimed at reducing the growing burden of non-communicable diseases (NCDs), including diabetes, obesity, hypertension and cardiovascular diseases, which health experts have linked to unhealthy diets and excessive sugar consumption.
- According to the World Health Organisation (WHO), the 10 leading causes of death accounted for 33 million fatalities in 2023, representing 54% of the 61 million deaths recorded globally during the year.
- Eight of these 10 leading causes were non-communicable diseases, accounting for 47% of all global deaths and 88% of deaths among the 10 leading causes.
- In April 2026, the Federal Ministry of Health and Social Welfare disclosed that approximately 8% of Nigerians were living with diabetes, equivalent to about 18 million people based on the country’s estimated population.
The ministry’s 2025 State of Health of the Nation Report also estimated that at least 40% of Nigerian adults were living with hypertension.
These figures highlight the growing burden of non-communicable diseases and the concerns driving calls for policies to discourage excessive sugar consumption.