Senate Approves Higher Sugar Tax, Creates Health Fund to Tackle Rising Non-Communicable Diseases

The Nigerian Senate has approved a new excise duty regime on sugar-sweetened beverages and endorsed the establishment of a dedicated funding mechanism to support public health interventions aimed at combating non-communicable diseases (NCDs) across Nigeria.

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

Presenting the report, Chairman of the Senate Committee on Finance, , said the new framework would replace the existing flat-rate excise duty of N10 per litre on sugar-sweetened beverages with a percentage-based levy linked to retail prices.

According to him, the levy structure will be determined by the Minister of Finance in line with international best practices and prevailing economic realities.

Musa explained that the current tax regime has been weakened by inflation and no longer provides an effective deterrent against excessive consumption of sugary drinks or generates sufficient revenue to address the growing health burden associated with such products.

He expressed concern over the increasing prevalence of non-communicable diseases, including diabetes, obesity, hypertension and cardiovascular ailments, many of which have been linked to excessive sugar consumption and unhealthy dietary habits.

The senator noted that the rising incidence of these diseases is placing additional pressure on Nigeria’s healthcare system, which remains underfunded and heavily dependent on out-of-pocket spending by citizens.

“The current excise structure has lost much of its effectiveness due to inflationary pressures. A more responsive and sustainable framework is needed both to influence consumer behaviour and to generate resources for public health interventions,” he said.

Following deliberations, the Senate directed the Minister of Finance to develop an appropriate levy structure that aligns with global standards while supporting Nigeria’s broader health and fiscal policy objectives.

The upper chamber also approved the creation of a dedicated health fund to strengthen efforts aimed at preventing and managing non-communicable diseases nationwide.

Lawmakers further recommended stronger enforcement mechanisms for excise duty collection, continuous engagement with industry stakeholders, and expanded public education campaigns on healthy nutrition and lifestyle choices.

Public health advocates have long argued that higher taxes on sugar-sweetened beverages can help reduce consumption, improve health outcomes and generate revenue for healthcare services, a strategy already adopted in several countries around the world.

The Senate’s decision marks a significant step in Nigeria’s efforts to address the growing burden of non-communicable diseases and improve public health financing.