*Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, discloses the Nigeria Customs Service has issued guidelines for the implementation of the policy measures on import duty and Value-Added Tax on essential food items to 鈥榩revent possible abuse, block potential loopholes, and provide safeguards against unintended consequences鈥�, as the Federal Government may forgo N188.37 billion in revenue in the process

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The Federal Government has approved the implementation of the fiscal measures to address the continued rise in inflation, especially on staples, and other essential food items in the Nigerian economy.

Mr. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, disclosed this development in a statement via his verified social media account Thursday, August 5, 2024.

Mr. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee

Oyedele explained the Nigeria Customs Service (NCS) issued the guidelines for the implementation of the policy measures on zero percent import duty rate and Value-Added Tax (VAT), in order to prevent possible abuse, block potential loopholes, and provide safeguards against unintended consequences.

The Nigeria Customs Service also in a letter dated 14th August, 2024, to this effect, stated 鈥渢his measure aims to mitigate the high costs of food items in the Nigerian market by making essential commodities more affordable to citizens.鈥�

Oyedele, therefore, enumerated such policy implementation measures on duty-free food imports to include the following:

1. Specific items to be granted duty and VAT waivers are those where we have material gaps in local production.
2. The duty waiver ranges from 5 percent on grain sorghum, millet, and maize to 20 percent duty waiver on wheat and beans and 30 percent waiver on husked brown rice.
3. The measures are for a temporary period, effective from 15 July, 2024 to 31 December 2024, to ensure that efforts aimed at enhancing local production are not undermined.
4. Eligibility to participate as an importer is restricted to established businesses with a track record of good governance and tax compliance for a minimum of 5 years.
5. Only companies with sufficient farmland for cultivation, feed mills, or agro-processing companies with an out-grower network for cultivation are eligible to import items, such as husked brown rice, grain sorghum, millet, wheat, maize or beans, on a quota basis.
6. A minimum of 75 percent of the imported items must be sold through recognised commodities exchanges, which will be monitored for compliance and sanctions, while export of the imported items in their original or processed form is prohibited.

Government’s committed to prioritising food security over short-term revenue goals, says Customs Chief

Earlier, the Nigeria Customs Service had disclosed that the Federal Government might forgo N188.37 billion in revenue over the next six months due to the duty waiver granted on the importation of staple foods.

The NCS revealed that Nigeria spent N3.82 trillion on importing wheat, beans, rice, and maize between 2020 and 2023.

Mr. Bashir Adewale Adeniyi, Comptroller-General of the NCS, told reporters at a press conference in Abuja, FCT, that the revenue forfeiture demonstrates the government鈥檚 commitment to prioritising food security over short-term revenue goals.

On July 8, 2024, the Federal Government announced a 150-day duty-free import window for food commodities to ensure a reduction in food inflation in Nigeria. The food commodities include maize, husked brown rice, wheat, and cowpeas.

The government also collaborated with states to expand land cultivation across the country.

Consequently, the government suspended duties, tariffs, and taxes for the importation of certain food commodities through land and sea borders.

Oyedele stated: 鈥淭he moderation in inflation rate just announced for July 2024 on the back of over 130 basis points decline in food inflation, which accounts for more than 50 percent of the Consumer Price Index basket, is expected to continue in the coming months as the new measures take hold.鈥�

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