Nigeria Federal High Court halts excise duty collection on sweetened beverages 

NIGERIA – The Nigeria Federal High Court has ruled that the Nigeria Customs Service (NCS) must cease the collection of excise duty on non-alcoholic carbonated sweetened beverages from members of the Nigeria Employers’ Consultative Association (NECA).  

The ruling benefits NECA members, including Nigeria Bottling Company Limited (NBC) and Seven-Up Bottling Company Limited (SBC). 

The court stated that the ruling barring NCS from collecting the excise duty would remain in force until the provisions of Section 13 of the Customs, Excise Tariff, etc. (Consolidation) Act, Cap C49 LFN are fully complied with.  

The decision was delivered by Justice Egwuatu on January 30 in Suit No: FHC/ABJ/CS/2004/2022, filed on October 28, 2022, by NECA, NBC, and SBC against the Nigeria Customs Service Board (NCSB) and the Minister of Finance, Budget and Economic Planning. 

The excise duty in question was introduced by the Finance Act of 2021, which imposed a charge of N10 per litre on non-alcoholic, carbonated, and sweetened beverages, effective from 2022.  

However, the policy faced strong opposition from members of the Organised Private Sector of Nigeria (OPSN), particularly NECA and the Manufacturers Association of Nigeria (MAN). 

Additionally, the court declared that the 2022 Fiscal Policy Measures and Tariff Amendments issued by the Minister of Finance on March 1, 2022, were null and void. 

Justice Egwuatu ruled that failure to follow due legal procedures renders actions or services legally ineffective. He emphasized that any service or policy not executed in accordance with the law remains invalid. 

As a result, the court ordered the NCS to immediately halt the collection of excise duty on the affected beverages until legal compliance is achieved. The plaintiffs were also awarded a cost of N200,000. 

The ruling comes amid growing calls for an increase in taxes on Sugar-Sweetened Beverages (SSBs) to address health concerns.  

In October 2024, the Executive Director of Corporate Accountability and Public Participation Africa (CAPPA), Akinbode Oluwafemi, urged the government to raise the tax on sugary drinks to curb the rising prevalence of Non-Communicable Diseases (NCDs). 

Oluwafemi highlighted that nearly 30 percent of annual deaths in Nigeria are linked to NCDs, including obesity, diabetes, hypertension, and cardiovascular diseases.  

He proposed increasing the tax from N10 per litre to N130 per litre or at least 20 percent of the retail price, estimating a 29 percent reduction in SSB consumption if the policy is effectively implemented. 

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