FG considers new excise duty on carbonated drinks

The Federal Government of Nigeria wants to introduce excise duty on carbonated drinks such as soft drinks and beverages that contain carbonated water. Excise duty is a charge on the production, sale or use of certain locally produced goods. The principal act for excise duties in Nigeria is the Customs and Excise Management Act (CEMA). Carbonated drinks are currently not subject to excise duties in Nigeria. However, alcoholic beverages, fruit juice wines, spirits, and other alcoholic beverages fall into the list of excisable items that attract excise duty. As a type of indirect tax, a seller can pass the tax burden to the final consumer. When this happens, the price of goods or services may also increase.

It is becoming clearer that the Federal Government (FG) wants to maximize its non-oil revenue as a steady source of income for the national budget. Taxation has thus become the latest gold-mine. With the introduction of excise duty on carbonated drinks and the proposed rise in the tax rate, FG is leaving no stone unturned in its revenue drive. Nevertheless, any amendment of the tax law or the creation of new tax legislation in Nigeria will follow the legal process.