FG Set to Give New Order on Tax Payment in Dollars, Import Duty

• The FG could cease paying import duties on essential goods such as core meals, prescription drugs, and other needs
• The deal contained in an ASAP report also includes plans to exempt fertilisers, poultry feed, bread, and cereals from taxes
• The report states that the government is considering importing maise and paddy rice from overseas into the country

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

The federal government may have started a plan to stop paying import tariffs on medications, core foods, and other necessities for a six-month period. This move is likely an attempt to control inflation.

This was stated in the "Inflation Reduction and Price Stability (Fiscal Policy Measures) Order 2024," an executive order that the president is anticipated to issue.

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According to Punch, the paper was intended to be signed by the President in April but was missing his signature.

Plan to waive tax

The agreement also includes plans to waive taxes on fertilisers, chicken feed, flour, and cereals.

The presidential order will require the Central Bank of Nigeria and the Ministry of Finance to design a strategy for providing low-interest loans to the manufacturing, pharmaceutical, and agricultural industries.

The document read in part:

“The import duty and other tariffs are to be suspended on the following for six months: Staple food items; Raw materials and other direct inputs used for manufacturing: Inputs for agriculture production including fertilisers, seedlings, and chemicals, Pharmaceutical products, Poultry feeds, flour and grains.”

FG to halt VAT on some items

For the remainder of the year, the president is also expected to halt the Value-Added Tax on Automotive Gas Oil, some essential and semi-processed staple foods like pasta and noodles, raw materials used in food production, electricity, and public transportation, as well as agricultural inputs, produce, and pharmaceuticals.

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“Suspension of Specific Taxes and Levies: For six months, the order suspends various taxes and levies, such as road haulage tax and other transportation-related charges; fees on bicycles, trucks, canoes, wheelbarrows, and carts; business premises registration; taxes and levies on shops, kiosks, and markets; animal trade and produce sales tax.”

According to the Accelerated Stabilization and Advancement Plan report, the government is considering importing paddy rice and maise from abroad.

To stop the rising trend of food inflation in the nation, the ASAP study suggested an executive order limiting the importation of paddy rice to millers.

Also, the following is advised in the document: Import duty exchange rate peg and suspension of import duty and VAT on certain commodities, such as millers' imports of paddy rice

To alleviate pressure on the naira, the document also requires all governmental levels and agencies to prioritise acquiring goods and services Made in Nigeria.

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A part of the document read:

“Governments at all levels and their agencies shall patronise made in Nigeria goods and services to the extent possible.

“Payments of taxes and levies in foreign currency shall be discontinued to enable the payers to pay in Naira while non-critical spending plans by any MDA involving foreign exchange cost shall be put on hold. States and local governments are encouraged to support these tax suspensions to ensure broad-based relief for businesses and consumers.”

Tinubu identifies 62 taxes paid by Nigerians

Legit.ng reported that President Bola Tinubu's administration is working to prune down taxes in Nigeria from the current 62 to a maximum of nine to create a business-friendly environment.

The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, stated this at the 2023 Annual Conference of the Institute of Chartered Accountants of Nigeria (ICAN) in Abuja on Tuesday, October 10, 2023.

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Oyedele, who asked the Nigerian government to remove VAT from diesel, said the step is essential as the country's current multiple tax system has made tax administration difficult and ineffective.

Source: Legit.ng