President Bola Tinubu, on Wednesday, approved the implementation of zero percent import duty and exemption of value-added tax (VAT) on basic food items.
This is according to a circular seen by BusinessDay on Wednesday.
“This is to confirm that His Excellency, Mr. President has approved the implementation of Zero percent duty rate (0 percent) and Value Added Tax (VAT) exemption on the under-listed basic food items with effect from 15th July, 2024 until the 31st day of December 2024,” the circular read.
The circular said the policy is restricted to the items listed in the letter such as maize, millet, rice, wheat , among others, and it is effective from July 15 until December 31 2024.
The letter said this measure is geared towards ameliorating the high cost of food items in the Nigerian market and shall be limited to the national supply gap to be determined by a committee set up by the minister of agriculture.
“The importation of these items shall also be limited to investors with milling capacity and verifiable Backward Integration Program for some of the items listed,” the circular noted.
Other items included in the zero duty policy include: husked brown rice, grain sorghum, and beans. These items had duty rate levy ranging from 30 percent – 5 percent.
Also on Wednesday, the Nigeria Customs Service (NCS) released guidelines for the implementation of zero import duty on food products.
Read also: Nigeria’s economic activities drop for 13th straight month in July, says CBN
A statement signed by Abdullahi Maiwada, national public relations officer, said to participate in the zero-duty importation of basic food items, a company must be incorporated in Nigeria and must have been operational for at least five years.
He said that only companies with filed annual returns and financial statements and paid taxes are eligible to participate, noting that the firm must have filed annual returns and financial statements and paid taxes and statutory payroll obligations for the past five years.
“Companies importing husked brown rice, grain sorghum, or millet need to own a milling plant with a capacity of at least 100 tons per day, operated for at least four years, and have enough farmland for cultivation. Those importing maize, wheat, or beans must be agricultural companies with sufficient farmland or feed mills/agro-processing companies with an out-grower network for cultivation,” Maiwada said.
He said the basic food items eligible for the zero percent duty rate are husked brown rice, grain sorghum, millet, maize, wheat, beans. These items previously had import duty rates ranging from 30 percent – 5 percent.
He noted that grain importers must sell 75 percent through commodities exchanges
“The Federal Ministry of Finance will periodically provide the NCS with a list of importers and their approved quotas to facilitate the importation of these basic food items within the framework of this policy.
“The policy requires that at least 75 percent of imported items be sold through recognised commodities exchanges, with all transactions and storage recorded. Companies must keep comprehensive records of all related activities, which the government can request for compliance verification.
“If a company fails to meet its obligations under the import authorisation, it will lose all waivers and must pay the applicable VAT, levies, and import duties. This penalty also applies if the company exports the imported items in their original or processed form outside Nigeria.”
Bashir Adewale Adeniyi, comptroller general of the Nigeria Customs Service, said the Customs remains committed to supporting government policies to enhance food security and promote economic stability.
“This measure aims to mitigate the high cost of food items in the Nigerian market by making essential commodities more affordable for citizens. The initiative is part of the government’s broader efforts to address food security challenges and ensure that basic foodstuffs are accessible to all Nigerians,” he said.
