OPSN: New Excise Bill is Misaligned with FG’s Fiscal Reform, May Undermine Tinubu’s Reform Agenda

Dike Onwuamaeze

The Organised Private Sector of Nigeria (OPSN) has called on the National Assembly to withdraw the proposed amendment to the Customs, Excise and Tariff Bill and maintain the current excise rates on Non-Alcoholic Drinks (NADs), saying the bill is misaligned with the federal government’s fiscal reform direction and may derail the fiscal reform agenda of the President Bola Tinubu administration.

The call was contained in a position paper presented yesterday by OPSN during the public hearing on the proposed amendment bill, which recently passed second reading in the National Assembly

OPSN comprises Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Manufacturers Association of Nigeria (MAN), Nigeria Employers’ Consultative Association (NECA), National Association of Small and Medium Enterprises (NASME), and National Association of Small Scale Industrialists (NASSI).

The position paper urged the National Assembly to withdraw the proposed amendment to the Customs, Excise and Tariff Bill and maintain the current excise rates on NADs, stating that the current draft of the bill is inconsistent with the federal government’s fiscal reform direction and contains several legal and administrative gaps.

OPSN pointed out, “Nigeria’s excise framework is increasingly fragmented, as new levies are introduced without coordinated assessment of their combined effects on production, investment, backward integration, employment, exports, and inflation, which may result in unintended consequences negating President Tinubu’s administration’s key economic reforms without delivering measurable public health gains.”

It said, “The proposed excise amendment introduces mathematical, legal, and administrative contradictions, worsens Nigeria’s already fragmented fiscal environment, and directly conflicts with national industrialisation priorities, including the Nigeria Sugar Master Plan.”

OPSN also warned that the amendment could weaken the beverage value chain, which is one of the country’s most significant contributors to non-oil revenue and a major employer of labour.

It added that the levy would push up operating costs, reduce capacity utilisation, and raise consumer prices at a time when households and small businesses were already under pressure, with many slipping deeper into poverty.

“This, in turn, could reduce VAT and CIT collections and place additional strain on medium-term FAAC revenues,” OPSN said.

It stated, “Nigeria’s non-alcoholic drinks sector is a critical economic stabiliser, supporting 1.5 million jobs, driving backward integration under the NSMP II, and contributing 40 – 45 per cent of gross revenues as taxes and yet already operating under severe macroeconomic strain and thin margins.”

According to the group, given that the beverage industry is among the non-oil revenue contributors, passing the bill into law can undermine the administration’s ease of doing business objectives at such a sensitive economic period.

It faulted the National Assembly for advancing the bill without coordination with the Federal Ministry of Finance, Presidential Fiscal Policy and Tax Reform Committee, FAAC, and other responsible institutions.

It stated that the bill contradicted the president’s emphasis on stability, predictability, simplicity, and non-disruptive tax reform.

OPSN further stressed that global and domestic evidence confirmed that steep or ambiguous SSB taxes in low-income economies lead to job losses, contraction of MSMEs, reduced government revenue, and no measurable health benefits, while widening inequality and accelerating the growth of the informal market.

It said, “The amendment bill contains internal contradictions (‘20 per cent levy per litre of retail price’) that are impossible to implement consistently.

“Over-taxation may shrink the formal sector, reduce VAT and CIT collections and shift consumers to informal markets. The bill may cut medium-term FAAC distributions and weaken state-level revenue stability.”

The group added that it was open to engagement with lawmakers, fiscal agencies, and civil society groups to ensure that any revision to the excise regime supported investment, jobs, and long-term revenue stability.