The Nigerian government has announced the kickoff of a two-year exemption from import duty and Value Added Tax (VAT) on critical raw materials used in pharmaceutical production.
The Nigeria Customs Service (NCS) revealed this on Tuesday, saying that the exemption is applicable to essential inputs such as Active Pharmaceutical Ingredients (APIs), excipients, and raw materials for producing vital medicines, Rapid Diagnostic Kits, Long-Lasting Insecticidal Nets (LLINs), reagents and packaging materials.
This mandate, approved by President Bola Tinubu, through the ministry of finance, is expected to help “strengthen” Nigeria’s healthcare sector and “reduce healthcare costs and boost local manufacturing,” the NCS said.
The move follows the Nigerian government’s agenda to step up local manufacturing of pharmaceutical products to meet at least 70 percent of domestic demand by 2030 through presidential initiatives announced last year.
The Nigerian pharmaceutical market is foreseen to reach $1.84 billion in revenue by 2025, with oncology drugs being the largest segment, yet over 70 percent of medicines in Nigeria are imported, exposing a heavy dependence on foreign pharmaceutical products.
The new inducement aims to help fix this. However, only recognised pharmaceutical manufacturers, as verified by the Federal Ministry of Health and Social Welfare, can partake.
“To ensure these fiscal incentives achieve their purpose, only manufacturers with a valid Tax Identification Number (TIN) will benefit,” Customs’ statement read.
For translucency, the NCS says it will compile and publish quarterly reports detailing all importations under this exemption, including importer details, quantities, and values of items imported.
The customs service encouraged stakeholders, including importers and relevant regulatory bodies, to collaborate in ensuring the policy’s success.