The Nigerian Senate has approved a major overhaul of the country’s sugar-sweetened beverage (SSB) tax regime, replacing the long-standing flat excise duty of ₦10 per litre with a new price-based levy aimed at boosting government revenue and tackling the growing burden of diabetes, obesity and other non-communicable diseases.
The upper chamber also approved the creation of a dedicated healthcare fund that will receive part of the revenue generated from the new tax system to strengthen healthcare delivery and support disease prevention programmes across the country.
The decision followed the consideration and adoption of the report on the Customs, Excise Tariff (Amendment) Bill, presented by Chairman of the Senate Committee on Finance, Senator Sani Musa, on behalf of the Joint Committee on Finance, Customs, Excise and Tariff.
Under the new framework, the current fixed charge of ₦10 per litre on sugar-sweetened beverages will be scrapped and replaced with a percentage-based tax tied to the retail price of products.
According to lawmakers, the exact tax rate will be determined by the Minister of Finance, who will take into account inflation, prevailing economic conditions and international best practices before setting the final figure.
Senators explained that the existing volume-based tax introduced years ago has gradually lost its effectiveness due to inflation and changing market realities.
They noted that although the levy was designed to discourage excessive consumption of sugary drinks and generate additional revenue, its impact has weakened over time.
According to the Senate, the outdated structure no longer provides enough deterrence against high sugar intake and has failed to generate sufficient revenue to address the rising healthcare costs associated with sugar-related diseases.
A major highlight of the amendment is the establishment of a special health fund financed by proceeds from the revised tax regime.
The fund will support disease prevention initiatives, public health campaigns, primary healthcare services and expanded health insurance coverage for vulnerable and underserved Nigerians.
Lawmakers said channeling part of the tax revenue directly into healthcare would ensure that Nigerians benefit from improved health services and preventive programmes.
They expressed confidence that the initiative would provide sustainable funding for healthcare interventions and strengthen the country’s ability to tackle chronic illnesses.
During deliberations, senators raised concerns over the increasing prevalence of non-communicable diseases such as diabetes, obesity, hypertension, stroke and cardiovascular disorders.
They warned that these illnesses continue to place enormous pressure on families, healthcare institutions and the economy.
Experts have linked the rise in such diseases to unhealthy diets, sedentary lifestyles and excessive consumption of sugar-laden beverages.
Lawmakers argued that adopting a price-based tax aligns Nigeria with global efforts aimed at reducing sugar consumption and encouraging healthier lifestyles.
The Senate emphasized that the revised tax policy is intended not only to increase government revenue but also to influence consumer behaviour.
By making sugary drinks relatively more expensive, policymakers believe consumers may reduce their intake of high-sugar products, while manufacturers could be encouraged to develop healthier alternatives.
With the approval of the amendment, Nigeria joins several countries around the world implementing stronger fiscal measures to combat diet-related illnesses and reduce the long-term health risks associated with excessive sugar consumption.
The Senate expressed optimism that the new framework would improve healthcare financing, promote healthier living and strengthen the country’s response to the growing burden of non-communicable diseases.
