The Nigeria Customs Service (NCS) recently announced that President Bola Tinubu has granted approval for the implementation of a Zero Percent Duty Rate (0%) and Value Added Tax (VAT) exemption on selected basic food items. This decision, which is seen as a significant move towards addressing the high cost of living in the country, was communicated through Olawale Edun, the Minister of Finance and Coordinating Minister of the Economy.
The policy is set to take effect from July 15, 2024, and will remain in place until December 31, 2024. According to Abdullahi Maiwada, the Customs spokesman, this initiative is part of the government’s broader efforts to alleviate the economic challenges faced by many Nigerians, particularly those related to the soaring prices of essential foodstuffs.
In a detailed statement, Maiwada emphasized that this temporary measure is aimed at providing immediate relief to the public while ensuring that the long-term strategies for safeguarding the interests of local farmers and protecting manufacturers are not compromised. He highlighted that the policy is designed to address the current supply gap in the market, ensuring that Nigerians have access to affordable food items.
To be eligible for the zero-duty importation of these essential food items, companies must meet specific criteria. Firstly, the company must be incorporated in Nigeria and have been operational for a minimum of five years. Additionally, these companies must have consistently filed their annual returns, financial statements, and paid all relevant taxes and statutory payroll obligations over the past five years.
For companies importing husked brown rice, grain sorghum, or millet, there are additional requirements. These include owning and operating a milling plant with a capacity of at least 100 tons per day for at least four years. Furthermore, these companies must possess adequate farmland to support cultivation efforts. Similarly, companies importing maize, wheat, or beans must either be agricultural companies with sufficient farmland or agro-processing companies with an established out-grower network for cultivation.
The list of basic food items eligible for the zero percent duty rate includes the following:
I. Husked Brown Rice
II. Grain Sorghum
III. Millet
IV. Maize
V. Wheat
VI. Beans
The Federal Ministry of Finance will periodically update the NCS with a list of approved importers and their designated quotas, ensuring that the importation process of these basic food items is conducted efficiently within the framework of this policy. To maintain transparency and accountability, at least 75% of the imported items must be sold through recognized commodities exchanges. All transactions and storage activities must be meticulously recorded, with companies required to keep comprehensive records for compliance verification by the government.
Furthermore, there are stringent penalties in place for companies that fail to adhere to the terms of their import authorization. If a company does not meet its obligations, it will forfeit all waivers and be required to pay the applicable VAT, levies, and import duties. This penalty also applies to companies that export the imported items, whether in their original or processed form, outside of Nigeria.
In a related development, the Comptroller-General of Customs (CGC), Adewale Adeniyi, has reaffirmed the agency’s commitment to streamlining processes that support President Tinubu’s food security initiative. Speaking at the Nigeria Customs Service Headquarters in Abuja on August 13, 2024, during the official launch of a book titled *Impactful Public Relations in Customs Management*, Adeniyi underscored the importance of the NCS’s role in facilitating the swift importation of food items. He emphasized that these efforts are aligned with standards aimed at reducing costs and lowering consumer prices.
The event, which coincided with the 2nd Economic Confidential Annual Lecture, provided a platform for the CGC to further stress the Customs Service’s dedication to addressing the food security challenges facing the nation. Adeniyi reiterated that the NCS is committed to implementing targeted measures that will boost agricultural production and ensure that Nigerians have access to affordable and nutritious food.
This policy, while temporary, reflects the government’s proactive approach to addressing the immediate economic challenges facing the country. It also highlights the importance of collaboration between various stakeholders, including the government, the private sector, and the agricultural community, in achieving the broader goal of food security and economic stability in Nigeria.
