Prices to Fall as FG Suspends Import Duties, VAT on Medical Supplies, Lists Affected Items
- President Bola Tinubu has signed an executive order suspending import duty and VAT on medical supplies
- The move is to reduce the cost of locally made medical supplies such as needles and syringes
- This comes amid several pharmaceutical companies announcing that they are ceasing operations in Nigeria
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.
President Bola Tinubu has signed an executive order suspending import duties and Value-Added Tax on important medical supplies imported into Nigeria.
The move is to reduce the cost of locally made pharmaceuticals, diagnostics, and medical devices such as needles and syringes.
Source: Getty Images
FG names affected medical supplies
The Minister of Health and Social Welfare, Muhammad Ali Pate, announced the development on Friday, June 28, 2024, stating that the Minister of Justice and Attorney General of the Federation would take the necessary action to codify the new order.
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The minister said:
“The order is pivotal to the success of the Initiative for Unlocking the Health Care Value Chain which was approved in October 2023 by the President.”
“The order introduces zero tariffs, excise duties, and VAT on specified machinery, equipment, and raw materials, aiming to reduce production costs and enhance our local manufacturers’ competitiveness.”
According to the minister, selected items include active pharmaceutical ingredients (APIs) and other essential raw materials needed to manufacture key health products, such as drugs, syringes, medicines, and long-lasting insecticidal diagnostic kits.
The new order aims to reduce prices
According to reports, the order establishes market-shaping mechanisms such as framework contracts and volume guarantees to encourage local manufacturers.
Additionally, the minister noted that the order requires collaboration between the ministers of health, finance, industry, Trade, and Investment to develop an implementation framework, obtain rapid regulatory approvals, and ease bottlenecks.
The new order also mandates that the Nigeria Customs Service (NCS), the National Agency for Food and Drug Administration and Control (NAFDAC), the Standards Organisation of Nigeria (SON), and the Federal Inland Revenue Service (FIRS) expedite action on implementing the new order and exemptions for two years.
Pharma firms shut down operations in Nigeria
Reports say medical supplies, including needles, syringes, and others, attract a 65% import adjustment tax, while surgical needles and dental equipment attract a five per cent import duty.
Many pharmaceutical firms have shut down in Nigeria in the last 12 months.
GSK announced its exit from Nigeria in 2023 after 52 years, while a syringe maker shut down operations.
The companies cited a challenging operating environment and forex constraints in their actions.
CBN slashes Customs FX rates for cargo clearance
Legit.ng previously reported that the Central Bank of Nigeria (CBN) has adjusted Nigeria Customs FX rates for cargo clearance in Nigeria’s ports.
Checks on the Customs trade portal show that the apex bank slashed the price from N1,505 to N1,470,191 to dollar.
This development means that importers will pay less to clear cargo from Nigeria’s ports, effective from the time the change was made.
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Source: Legit.ng
