Senate raises sugar tax, establishes health fund for diseases

The Senate on Wednesday approved a new excise duty regime on sugar-sweetened beverages. The upper chamber also endorsed the creation of a dedicated funding stream to strengthen public health interventions across the country.

This is in a move aimed at curbing rising cases of non-communicable diseases (NCDs).

The decision followed the consideration and adoption of the report on the Customs, Excise Tariff, etc. (Amendment) Bill by the Joint Committee on Finance and Customs, Excise and Tariff during plenary.

The report was presented by the Chairman, Senate Committee on Finance, Sen. Sani Musa.

He said that under the new framework, the existing N10 per litre excise duty on sugar-sweetened beverages would be replaced with a percentage-based levy tied to retail prices, to be determined by the Minister of Finance in line with global best practices.

Musa noted that the current flat-rate tax has been significantly eroded by inflation and is no longer sufficient to discourage excessive consumption or generate meaningful fiscal impact.

Musa expressed concern over the rising prevalence of non-communicable diseases such as diabetes, obesity, hypertension and cardiovascular conditions, which are increasingly linked to high sugar consumption and unhealthy dietary habits.

He further observed that Nigeria’s healthcare system remains underfunded and heavily dependent on out-of-pocket spending, leaving many citizens exposed to financial hardship and limited access to care.

The Senate thereafter directed that the Minister of Finance determines an appropriate levy structure consistent with global standards and ensures that implementation aligns with Nigeria’s broader health and fiscal goals.

It also recommended stronger enforcement mechanisms for excise collection, continuous stakeholder engagement, and complementary measures such as nutrition awareness campaigns.(NAN)