The Nigeria Customs Service (NCS) has announced the implementation of a Zero Percent Duty Rate (0%) and Value Added Tax (VAT) exemption on selected basic food items, following President Bola Tinubu’s approval. This policy, effective from July 15, 2024, until December 31, 2024, aims to alleviate the financial burden on Nigerians due to rising food prices.
Key Details of the Policy
- Eligible Food Items: The exemption applies to husked brown rice, grain sorghum, millet, maize, wheat, and beans.
- Eligibility Criteria for Companies:
- Must be incorporated in Nigeria and operational for at least five years.
- Should have no outstanding tax liabilities or statutory payroll obligations during this period.
- Companies importing husked brown rice, grain sorghum, or millet must own a milling plant with a capacity of at least 100 tons per day and sufficient farmland for cultivation.
- Those importing maize, wheat, or beans must be agricultural companies with adequate farmland or agro-processing facilities.
- Compliance Requirements: At least 75% of the imported items must be sold through recognized commodities exchanges. Companies are required to maintain comprehensive records of all activities related to the importation, which may be subject to government verification.
- Consequences for Non-Compliance: Companies that fail to meet their obligations will lose all waivers and must pay the applicable VAT, levies, and import duties.
The NCS emphasized that while this temporary measure is intended to address immediate food price challenges, it does not undermine long-term strategies to protect local farmers and manufacturers. The initiative is part of broader efforts to combat food inflation and ensure the availability of essential commodities in Nigeria.