FG Loses as Court Rules Against Imposing Tax on Coke, Pepsi, Other Carbonated Drinks

• A Federal High Court in Nigeria has halted the Nigerian government from implementing a N10 excise duty on soft and carbonated drinks
• The ruling came amid a suit filed by the Nigeria Employers’ Consultative Association (NECA) in 2022 after the government introduced the tax
• The Nigerian government reportedly introduced the sugar tax to discourage the excessive consumption of sugar

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

A Federal High Court in Abuja has barred the Nigerian government from imposing excise duty on carbonated drinks, declaring the plan invalid.

The ruling comes amid a suit filed two years ago by the Nigeria Employers’ Consultative Association (NECA) after the government introduced an excise duty of N10 per litre of carbonated, non-alcoholic, and sweetened beverages.

FG reveals the reason for imposing sugar tax

The sugar tax was reportedly meant to dissuade excessive consumption of sugar beverages, which they say leads to diabetes, obesity and other health challenges.

Read also

“Nigeria's telecom tariffs are relatively Low”: NLC criticised over planned protest

NECA challenged the circular, stressing that the duty was unjustifiable.

According to TheCable, the Minister of Finance, Wale Edun, and Atiku Bagudu, the Minister of Budget and National Planning, were named as part of the defendants in the suit.

NECA disclosed that Justice O.A. Egwuatu of the Abuja High Court rejected the Ministry of Finance’s preliminary injunction due to a lack of merit. 

The association said that the substantive case is invalid and ultra-vires, according to the court, stating that the powers of the second defendant and first defendant are not entitled to demand transport and feeding allowances from NECA.

Adewale Smatt-Oyerinde, NECA’s director general, hailed the judgement as a victory for organised businesses in Nigeria against attempts to impose additional burdens on taxes.

FG considers temporary suspension of sugar tax 

In July last year, the finance minister said the Nigerian government was considering suspending the temporary, the potential halt was under a six-month economic stabilisation plan.

Read also

MTN, Airtel, others set date to commence 50% tariff hike as banks rush to clear USSD debt

Experts say the development will give manufacturers and businesses some breathing space as manufacturers reported that there was an increase in unsold goods last year.

According to the experts, the ruling, if upheld, will also leave some cash in consumers’ pockets as the country battles high inflation.

FG moves to increase tax on Coke, Pepsi, others

Legit.ng earlier reported that the Federal Ministry of Health has committed to raising the tax on sugar and other sweetened beverages from 10% to 20%.

The move is to fight the increasing public health concerns associated with excessive sugar consumption.

The move aims to encourage healthy beverage choices, reduce the intake of sugars and soft drinks, and contribute to a healthier future for Nigerians.

Source: Legit.ng