Zero VAT on pharma, medical devices for kickoff as FG finalises framework

The Federal Government has finalised the implementation framework for the executive order eliminating value-added-tax and excise duties on pharmaceutical products and medical devices.

Tunji Alausa, Nigeria’s minister of state for health and social welfare announced on Wednesday, revealing that the harmonised framework has been cleared for gazetting.

“This critical step ensures that the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service can proceed with the implementation of zero VAT and excise duties on pharmaceutical products and medical devices,” Alausa stated in the announcement on X, formerly Twitter.

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“This is a significant milestone, as it opens the door for our local pharmaceutical and medical device manufacturers to begin fully benefiting from the relief measures outlined by President Bola Ahmed Tinubu, in the Executive Order.”

The implementation is expected to drive down the rising cost of essential pharmaceutical products and medical consumables in the country, easing the financial pain faced by millions of Nigerians who depend on these critical health supplies.

Alausa noted that the gazetting of the implementation framework represents the third pillar of the Ministry of Health’s four-point agenda, which focuses on unlocking the healthcare value chain.
By creating an environment that supports local manufacturers, the ministry hopes to foster a healthier, more self-reliant nation, and ensure that quality healthcare becomes more accessible and affordable, Alausa added.

Key stakeholders in the pharmaceutical sector have anticipated this move since President Tinubu introduced the widely cheered policy nearly four months ago to boost local production of essential medical supplies.

The executive order has been seen as a key action demonstrating government’s interest in easing health companies’ cost of operation, following a turbulent year of unusual rise in drug prices.

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Patients face limited access to vital drugs, harming their health and wellbeing.

The order introduces zero tariffs, excise duties, and value-added tax on specified machinery, equipment, and raw materials.

Items including active pharmaceutical ingredients (APIs), excipients, and raw materials for syringes and needles, long-lasting insecticidal nets, and rapid diagnostic kits also qualify to benefit from this policy.