FG approves plans to slash controversial 110% duty on rice

As part of its determination to encourage investment in the rice value chain through backward integration, the Federal Government has approved plans to slash the controversial 110 percent import duty and levy on rice.

This is as President Goodluck Jonathan has approved the new three-year (2014-2017) fiscal policy measure on rice with effect from May 26, 2014.

The policy, which started in January 2013 with the aim of discouraging importation and encouraging local rice production, was seen to have succeeded in promoting smuggling of the commodity through the land borders.

According to the new fiscal policy, imported husked-brown, paddy, unprocessed and semi-milled or wholly milled rice was reduced to 20 percent levy and 10 percent duty for investors that have rice milling capacity while importation by full-time traders would attract 60 percent levy and 10 percent duty.

The Federal Government had given all importers of rice with shiploads waiting at various nation’s seaports Friday, June 13, 2014, to clear the rice upon submission of a letter of indemnity to the Nigeria Customs Service (NCS). This indemnity enabled the importers to clear their consignments without paying additional demurrage.

Disclosing these, a senior government official close to the Ministry of Finance, said Ngozi Okonjo-Iweala, coordinating minister for the economy and minister of finance, is expected to convey the president’s approval to Anyim Pius Anyim, secretary to the government of the federation; Akinwunmi Adesina, minister of agriculture; Olusegun Aganga, minister of industry, trade and investment; Abdullahi Inde Dikko, comptroller-general of Customs and Kabir Mashi, acting chairman, Federal Inland Revenue Service, amongst others, to ensure strict compliance and other necessary actions.

The circular dated June 16, 2014 reads in part: “This is to inform that pending when the next fiscal policy measures on rice are issued, all importers of rice with shiploads already awaiting clearance at Nigerian ports should be allowed to clear their consignments upon the submission of a letter of indemnity to Customs. The indemnity is to allow them clear their various consignments of rice without attracting further demurrage, pending when the next 2014 duty rates and levies are announced, at which point they will pay the new rates accordingly.”