Tinubu Suspends Import Duties, VAT on Pharmaceutical Inputs
June 29, 2024
President Bola Tinubu has signed an executive order eliminating tariffs, excise duties, and value-added tax (VAT) on imported pharmaceutical inputs.
This initiative aims to rejuvenate Nigeria’s health sector and boost local production of healthcare products.
Muhammad Ali Pate, the Coordinating Minister of Health and Social Welfare, announced the executive order on Friday, highlighting its significance in revitalizing the Nigerian health sector.
The order targets increased local production of pharmaceuticals, diagnostics, and medical devices such as needles and syringes, biologicals, and medical textiles.
“In a transformative move to revitalize the Nigerian health sector, His Excellency President Bola Ahmed Tinubu, GCFR, has signed an Executive Order aiming to increase local production of healthcare products (pharmaceuticals, diagnostics, devices such as needles and syringes, biologicals, medical textile, etc.),” Pate stated.
The minister further mentioned that the Minister of Justice and Attorney General of the Federation, Prince Lateef Olasunkanmi Fagbemi SAN, would be responsible for codifying the new order.
This executive order is seen as a crucial component of the initiative to unlock the healthcare value chain (PVAC_NG), which President Tinubu approved in October 2023.
The order introduces zero tariffs, excise duties, and VAT on specified machinery, equipment, and raw materials.
This measure is expected to reduce production costs and enhance competitiveness of local manufacturers.
“Specified items include Active Pharmaceutical Ingredients (APIs), excipients, other essential raw materials required for manufacturing of crucial health products like drugs, syringes and needles, Long-lasting Insecticidal Nets (LLINs) and Rapid Diagnostic Kits, among others.
“The Order also provides for establishing market shaping mechanisms such as framework contracts and volume guarantees, to encourage local manufacturers*, he said.
According to the minister, the order mandated collaboration among the ministers of Health, Finance, as well as Industry, Trade and Investment, to develop a harmonised implementation framework — expediting regulatory approvals and reducing bottlenecks.
Pate said agencies, including the Nigeria Customs Service (NCS), National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organisation of Nigeria (SON), and Federal Inland Revenue Service (FIRS) would ensure swift implementation with special waivers and exemptions effective for two years.
“The implication of this order is pivot towards market-based incentives to encourage medical industrialization, reducing costs of medical products through import substitution over time, creating and retaining economic value and enabling job creation in the healthcare value chain,” the minister said.
Pate thanked Tinubu for his courage and commitment to ensuring Nigeria was put back on the path to prosperity.
He also expressed gratitude to everyone who contributed to the ideas that culminated in the consensus that resulted in the significant milestone.