Judicial Ruling Against Carbonated Drink Excise Duty
A Federal High Court in Abuja has ruled against the implementation of the excise duty on carbonated drinks introduced by the Nigerian government. The court declared 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, as invalid and beyond the minister’s powers.
This judgment was delivered by Justice Obiora Egwuatu in a case filed by the Nigeria Employers’ Consultative Association (NECA) against the Nigeria Customs Service Board and the Minister of Finance. NECA had challenged the government’s imposition of a ₦10 per litre excise tax on non-alcoholic, carbonated, and sweetened beverages, arguing that it was unjustifiable and imposed an additional burden on businesses.
The court also held that the Nigeria Customs Service lacked the authority to administer, assess, or enforce the collection of excise duties on these beverages without specific enabling legislation. Furthermore, it ruled that the Customs Service was not entitled to demand transportation and feeding allowances from NECA members.
This ruling effectively halts the collection of the ₦10 per litre excise duty on non-alcoholic, carbonated, and sweetened beverages, pending compliance with the relevant statutory provisions.