The federal government has approved the implementation of a zero percent duty rate and Value Added Tax (VAT) exemption on selected basic food items. This decision, confirmed by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, was communicated to THISDAY yesterday evening.
The Nigeria Customs Service (NCS) also announced the approval, stating that President Bola Tinubu had authorized the implementation through the finance minister. According to the National Public Relations Officer, Chief Superintendent of Customs Abdullahi Maiwada, the new policy will take effect from August 15, 2024, and will remain in place until December 31, 2024.
This initiative aims to reduce the high cost of essential food items in the Nigerian market, making them more affordable for citizens. Maiwada highlighted that the policy is part of the government’s broader efforts to address food security challenges and ensure that basic foodstuffs are accessible to all Nigerians.
He emphasized that while this temporary measure is designed to alleviate current hardships, it does not compromise the long-term strategies to support local farmers and protect manufacturers. The focus of the policy will be on addressing the national supply gap.
To qualify for the zero-duty importation, companies must be incorporated in Nigeria, have been operational for at least five years, and have consistently filed annual returns, financial statements, and paid taxes and statutory payroll obligations during this period.
Specifically, companies importing husked brown rice, grain sorghum, or millet must own a milling plant with a capacity of at least 100 tons per day, have operated it for at least four years, and possess adequate 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.
Eligible food items under the zero percent duty rate include husked brown rice, grain sorghum, millet, maize, wheat, and beans.
The Federal Ministry of Finance will periodically provide the NCS with a list of approved importers and their quotas to facilitate the importation of these basic food items within the policy framework.
The policy mandates that at least 75 percent of the imported items be sold through recognized commodities exchanges, with all transactions and storage properly recorded. Companies must maintain comprehensive records of all related activities, which may be requested by the government for compliance verification.
Maiwada warned that companies failing to meet their obligations under the import authorization will lose all waivers and be required to pay the applicable VAT, levies, and import duties. The penalty also applies if a company exports the imported items in their original or processed form outside the country.
He reiterated that the NCS, under the leadership of Comptroller General of Customs Bashir Adewale Adeniyi, remains committed to supporting government policies aimed at enhancing food security and promoting economic stability. The service urged all stakeholders to cooperate fully in implementing this initiative for the benefit of all Nigerians.
