FG Grants Two-Year VAT Exemption for Pharmaceutical Raw Materials
By Patience Ikpeme
The Federal Government has initiated a two-year Value Added Tax (VAT) exemption for critical raw materials used in the manufacture of pharmaceutical products.
The Federal Ministry of Finance has instructed the Nigeria Customs Service (NCS) to implement this exemption.
The Nigeria Customs Service, in a statement by Assistant Comptroller of Customs National Public Relations Officer, Abdullahi Maiwada, made this known in Abuja on Wednesday.
The exemption applies to Active Pharmaceutical Ingredients (APIs), excipients, and other essential raw materials necessary for the production of essential medicines, Long-Lasting Insecticidal Nets (LLINs), Rapid Diagnostic Kits, reagents, and packaging materials.
This fiscal incentive is aimed at pharmaceutical product manufacturers recognized by the Federal Ministry of Health and Social Welfare, provided they possess a valid Tax Identification Number (TIN).
“This measure ensures that the benefits directly support legitimate manufacturers committed to strengthening Nigeria’s healthcare infrastructure,” the customs statement clarified.
To monitor implementation and ensure transparency, the Service will compile quarterly reports on all imports under this policy, including details on importers, quantities, and values of imported items.
The Service called for stakeholder cooperation to facilitate trade, enhance border security, and promote national development. Successful implementation of this policy requires collaboration from importers, manufacturers, and relevant government agencies.
On February 28, 2024, President Bola Ahmed Tinubu signed three Executive Orders to improve the investment climate and position Nigeria as a preferred investment destination for the Petroleum Sector in Africa.
These orders, effective February 28, 2024, include the oil and gas companies (tax incentives, exemption, remission, etc.) Order, 2024, the presidential directive on local content compliance requirements, 2024, and the presidential directive on reduction of petroleum sector contracting costs and timelines, 2024.
