Home News Federal Government approves duty-free importation of food items

Federal Government approves duty-free importation of food items

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The Federal Government has approved a new policy to temporarily eliminate import duties and Value -Added Tax (VAT) on certain basic food items.

This directive was confirmed by the Ministry of Finance in a letter to the Nigerian Customs Service dated August 8th, 2024.

The Nigerian Customs Service has hereby, been instructed to begin enforcement of the Policy.

In execution of the policy, the Comptroller-General of the National Customs Service (NCS), Bashir Adeniyi, directed officials of the service to begin enforcement measures.

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The NCS stated that Ministry of Finance sent a letter to the service, informing the agency that Tinubu has approved the implementation, with the circular titled, ” Approval for the implementation of zero per cent duty rate on basic food items.”

In the circular titled, ” Approval for the implementation of zero per cent duty rate on basic food items”, the NCS said the Ministry of Finance sent a letter to the service, informing the agency that Tinubu has approved the implementation.

As written in the letter dated August 14, 2024 and signed by the Deputy Comptroller-General, C.K Niagwan, the Minister of Finance stated that the policy is restricted to these food items: maize, husked brown rice, wheat, grain, beans, and millet, and takes effect from July 15 to December 31, 2024.

The letter read, “I am directed to forward herewith a copy of the Federal Ministry of Finance letter, confirming His Excellency, Mr. President’s approval for the implementation of zero per cent duty rate and Value Added Tax exemption on some basic food items.

“You are to note the following, ‘the policy is restricted to the items listed in the letter and it is effective July 15, 24 until December 31, 24. The importation of these items shall be limited to investors with milling capacity and a verifiable Backward Integration Programme for some of the items.”

The Deputy Director of the NCS further stated that the Ministry of Finance will provide a list of approved importers and quotas, and the NCS is required to ensure strict compliance.

The Federal Ministry of Finance shall from time to time, during the implementation period, furnish the Nigeria Customs Service with the list of importers and their approved quotas to guide the importation of the basic food items. Ensure wide circulation for strict compliance, please,” the letter added.

On July 10, the Federal Government announced a significant policy change aimed at curbing inflation. The suspended duties, tariffs, and taxes on the importation of food staples through both land and sea borders as part of a broader effort to reduce inflation.

The NCS announced on August 7, 2024 that the duty waiver on imported foods would be implemented within the next week.

In the initial letter, the finance minister, Wale Edun, said the “measure which is geared towards ameliorating the high cost of food items in the Nigerian market shall be limited to the national supply gap to be determined by a committee set up by the minister”.

Highlighting the Government’s reconsideration, and reduction of the duty rate and levy from 30 per cent to zero for husked brown rice, from five per cent to zero for grain sorghum, millet, and maize, and eliminated the 20 per cent duty levy for wheat and beans.

Edun reiterated that the policy is restricted to investors with milling capacities and a verifiable Backward Integration Programme (BIP), which means they must source raw materials locally.

“This measure which is geared towards ameliorating the high cost of food items in the Nigerian market shall be limited to the national supply gap to be determined by a committee set up by the minister.

“The importation of these items shall also be limited to investors with milling capacity and verifiable Backward Integration Programme for some of the items,” the minister said.

However, the Comptroller-General of the Customs Service said the Federal Government anticipates a revenue loss of approximately #188 billion due to the suspension of import duties on these food items.

Adeniyi said the NCS will use special corridors to manage the importation and clearance of these food items to ensure efficient implementation.

 

 

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