Hopes for Cheaper Medicine As FG Begins 2-Year Import Duty Waiver on Pharmaceutical Raw Materials

• The Nigerian government has begun implementing a two-year waiver on tax-free imports of pharmaceutical raw materials.
• The decision to waive taxes is aimed at boosting local medicine production, according to the federal government.
• The high cost of medicines, driven by foreign companies, has made healthcare provision very expensive and unaffordable

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Nigeria Customs Service (NCS) has begun implementing a Presidential Executive Order aimed at strengthening local production of healthcare products, reducing medical costs, and encouraging domestic investment in the sector.

This announcement was contained in a statement signed by Abdullahi Maiwada, Assistant Comptroller of Customs and National Public Relations Officer, on behalf of the Comptroller-General of Customs.

The directive, approved by President Bola Ahmed Tinubu through the Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, grants a two-year exemption from import duty and Value Added Tax (VAT) on critical raw materials for pharmaceutical production.

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The exemption covers Active Pharmaceutical Ingredients (APIs), excipients, Long-Lasting Insecticidal Nets (LLINs), Rapid Diagnostic Kits, reagents, and packaging materials essential for medicine manufacturing.

The statement read in part:

“Consequently, critical raw materials essential for the production of pharmaceutical products will be exempted from import duty and Value Added Tax (VAT) for a period of two years.

“This exemption covers Active Pharmaceutical Ingredients (APIs), excipients, and other vital raw materials required for manufacturing essential medicines, Long-Lasting Insecticidal Nets (LLINs), Rapid Diagnostic Kits, reagents, and packaging materials.

“Drawing from Presidential directives aimed at enhancing local manufacturing of healthcare products, reducing the costs of medical equipment and consumables, as well as stimulating local investments, the Nigeria Customs Service (NCS) is pleased to announce that His Excellency, President Bola Ahmed Tinubu GCFR, through the Honourable Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, has approved the comprehensive guidelines to actualise these objectives.”

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Requirements to qualify

Only pharmaceutical manufacturers recognised by the Federal Ministry of Health and Social Welfare will be eligible for these tax waivers, provided they hold a valid Tax Identification Number (TIN).

This measure aims to ensure that only legitimate manufacturers benefit from the policy, BusinessDay reports.

To enhance transparency, the NCS will publish quarterly reports detailing all tax-exempt imports, including information on importers, quantities, and values.

The NCS reaffirmed its commitment to facilitating trade, securing borders, and supporting national development, calling on manufacturers, importers, and government agencies to collaborate in ensuring the policy's success.

Importers to pay less as CBN reduces Customs rate to clear goods

Legit.ng previously reported that the CBN made adjustments to the Customs exchange rate used by importers to clear goods at ports.

The new exchange rate reflected a slight reduction from the previous figure, following the improvement of the naira.

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The Customs rate is pegged against the performance of the naira in the official NAFEX window against the dollar.

In February 2024, the CBN instructed the Customs Service to apply the same forex rate used at the time of importation for goods clearance in Nigeria.

Source: Legit.ng