Nigeria Customs begins implementation of two-year import duty and VAT waiver on pharmaceutical raw materials
The Nigeria Customs Service (NCS) has commenced the implementation of a two-year waiver on import duties and Value Added Tax (VAT) for essential healthcare products, following a directive from the Federal Government aimed at boosting the health sector and improving access to critical medical supplies.
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 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.”
This initiative aligns with President Tinubu’s administration’s broader economic strategy to promote self-sufficiency, reduce dependence on imported medical products, and enhance access to affordable healthcare solutions, the statement said.
Key Incentives for Local Manufacturers
- As part of the newly approved measures, 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.
- The 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.
- This policy is expected to significantly lower production costs, encourage new investments in the pharmaceutical sector, and foster the development of a more resilient healthcare industry in Nigeria.
Eligibility Criteria for Manufacturers
To ensure that these fiscal incentives are fully utilised and directed toward genuine stakeholders, eligibility is restricted to manufacturers of pharmaceutical products recognised by the Federal Ministry of Health and Social Welfare.
Additionally, eligible manufacturers must possess a valid Tax Identification Number (TIN).
This measure ensures that the benefits directly support legitimate manufacturers committed to strengthening Nigeria’s healthcare infrastructure.
The statement noted, “In commitment to transparency and effective monitoring, the NCS will compile quarterly reports detailing all importations under this policy, including data on importers, quantities, and values of the imported items, ensuring the policy’s implementation aligns with its intended objectives.”
More insights
In June 2024, President Tinubu signed an Executive Order aiming to increase the local production of healthcare products.
The order introduces zero tariffs, excise duties and Value Added Tax on specified machinery, equipment and raw materials, aiming to reduce production costs and enhance our local manufacturers’ competitiveness.
