VAT exemption, zero duty to crash food prices

Yesterday, the federal government passed the law that will exempt certain basic food goods from value added tax (VAT) and impose a zero percent duty rate on them. The development was verified to THISDAY yesterday evening by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.

In a statement, the Nigeria Customs Service (NCS) also revealed the development and stated that President Bola Tinubu had approved its execution through the minister of finance. Chief Superintendent of Customs and National Public Relations Officer Abdullahi Maiwada went on to say that the new policy will be in place from August 15, 2024, which is today, until December 31, 2024.
The goal of the initiative is to reduce the high price of food goods in the Nigerian market by lowering the cost of necessities for the populace. Maiwada emphasized that the program was a component of the government’s larger endeavor to address issues related to food security and guarantee that all Nigerians had access to essential commodities. He emphasized that even while the short-term solution was meant to alleviate immediate difficulties, it did not compromise the long-term plans put in place to defend regional farmers and industries.

The national supply imbalance would be the main emphasis of the policy’s execution, the customs official continued.
He clarified that a company had to be incorporated in Nigeria, operating for at least five years, filing annual returns and financial statements, paying taxes and statutory payroll obligations for the previous five years in order to be eligible for the zero-duty importation of basic food items. The statement went on to say that, in order to facilitate the import of these staple foods within the parameters of the program, the Federal Ministry of Finance will sporadically give the NCS a list of importers and their authorized quotas. According to the policy, at least 75% of imported goods must be sold through reputable commodities exchanges, and all sales and storage must be documented.

Businesses are required to maintain thorough records of all associated actions as government may ask for confirmation of compliance.