Court Overturns FG’s ₦10 Per Litre Tax On Carbonated Drinks

A federal high court in Abuja has ruled against the implementation of the excise duty on carbonated drinks, which was introduced by the Nigerian government, deeming the move unlawful.

This ruling stems from a case filed in 2022 by the Nigeria Employers’ Consultative Association (NECA), challenging the federal government’s introduction of a ₦10 per litre excise tax on non-alcoholic, carbonated, and sweetened beverages.

The tax, commonly referred to as a “sugar tax,” was intended to reduce the consumption of sugary drinks, which are linked to health issues such as diabetes, obesity, and other related conditions.

However, NECA, representing the interests of businesses, contested the introduction of the tax, asserting that it was unjustifiable.

Among the defendants named in the lawsuit were the Minister of Finance, Wale Edun, and the Minister of Budget and National Planning, Atiku Bagudu.

On Monday, NECA issued a statement announcing that Justice O.A. Egwuatu of the federal high court had dismissed the Ministry of Finance’s preliminary objection, deeming it without merit after three years of intense legal proceedings.

The statement quoted the judgment, saying, “Delivering judgment on the substantive case, the court held in summary that the circular issued by the 2nd Defendant (Federal Ministry of Finance) is invalid and ultra-vires stating that the powers of the 2nd Defendant; and the 1st Defendant (the Customs Service) is not entitled to demand transport and feeding allowances from the plaintiffs (NECA members).”

Furthermore, the court declared that the circular titled “Approval for the Implementation of 2022 Fiscal Policy Measures and Tariff Amendments,” dated March 1, 2022, issued by the Minister of Finance, Budget and National Planning, was invalid and beyond the authority of the 2nd Defendant.