The Nigeria Customs Service (NCS) has announced a tax exemption for key raw materials used in the production of healthcare products, removing both import duties and Value Added Tax (VAT) on these items.
Government’s Commitment to Reducing Healthcare Costs
According to a statement by Customs Spokesman Abdullahi Maiwada, the exemption aligns with President Bola Ahmed Tinubu’s Executive Order, which seeks to reduce the cost of pharmaceutical products in the country.
The statement highlighted that the initiative was approved by the Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, as part of broader fiscal measures to support local healthcare manufacturing.
Nigeria Grants Tax Relief on Healthcare Raw Materials to Lower Costs: Scope of the Tax Relief
Under this policy, critical raw materials required for pharmaceutical production will be exempt from import duties and VAT for a two-year period.
The exemption covers Active Pharmaceutical Ingredients (APIs), excipients, and essential raw materials used in producing medicines, Long-Lasting Insecticidal Nets (LLINs), Rapid Diagnostic Kits, reagents, and packaging materials.
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Eligibility Criteria for Manufacturers
However, the relief will only be available to manufacturers officially recognized by the Federal Ministry of Health and Social Welfare. Additionally, eligible companies must possess a valid Tax Identification Number (TIN) to benefit from the tax incentive.
Strengthening Nigeria’s Healthcare Infrastructure
The Nigeria Customs Service emphasized that the measure is intended to strengthen the country’s healthcare infrastructure by reducing production costs for legitimate pharmaceutical manufacturers.
Transparency and Compliance Measures
To ensure transparency, the NCS has committed to compiling and publishing quarterly reports detailing all imports under this tax relief policy.
These reports will include information on importers, quantities, and the value of imported items, ensuring the policy’s implementation aligns with its intended objectives.
Expert Opinions on the Tax Policy
Tax experts believe this move could boost the local pharmaceutical industry by making essential medicines more affordable while also ensuring compliance with fiscal regulations.
