- Customs has given guidelines and criteria for companies to participate in the duty-free importation of selected food items as announced by the Federal Government
- Among other things, participating companies must have been operational for at least five years, filed annual returns and financial statements, paid taxes and other statutory obligations
- There are penalties for defaulters, including losing waivers and payment of applicable VAT, levies and import duties
The Nigeria Customs Service (NCS) has said only companies incorporated in Nigeria and operational for at least five years, must have filed annual returns and financial statements, and paid taxes and statutory payroll obligations for the past five years, are eligible to participate in the government's duty-free importation of food items policy.
These guidelines were contained in a statement by the National Public Relations Officer of Customs, Abdullahi Maiwada, on Wednesday, August 14.
The statement also affirmed that President Bola Tinubu, through the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, has approved the regulation for the implementation of a zero per cent duty rate and Value Added Tax (VAT) exemption on the selected basic food items.
It added that the policy is effective from July 15 and will remain in force until December 31, 2024. It notes that the measure aims to mitigate the high cost of food items in the Nigerian market by making essential commodities more affordable for citizens.
The statement read, “It is important to emphasise that while this temporary measure is intended to address current hardships, it does not undermine the long-term strategies put in place to safeguard local farmers and protect manufacturers.
“It is pertinent to note that the implementation of this policy will focus on addressing the national supply gap.
“To participate in the zero-duty importation of basic food items, a company must be incorporated in Nigeria and have been operational for at least five years. It must have filed annual returns and financial statements and paid taxes and statutory payroll obligations for the past five years.
“Companies importing husked brown rice, grain sorghum, or millet need to own a milling plant with a capacity of at least 100 tons per day, operated for at least four years and have enough farmland for cultivation.
“Those importing maize, wheat, or beans must be agricultural companies with sufficient farmland or feed mills/agro-processing companies with an out-grower network for cultivation.”
From the statement, the food items attract zero duty rates from previous rates of 30 per cent for husked brown rice, five per cent for grain sorghum, millet and maize, 20 per cent for wheat and 30 per cent for beans.
‘There will be penalties for flouting order’
The statement also noted that there will periodic requests for compliance verification by the government, adding that companies that flout the order will face penalties, which include losing waivers and payment of applicable VAT, levies and import duties.
It read, “The Federal Ministry of Finance will periodically provide the NCS with a list of importers and their approved quotas to facilitate the importation of these basic food items within the framework of this policy.
“The policy requires that at least 75 per cent of imported items be sold through recognised commodities exchanges, with all transactions and storage recorded.
“Companies must keep comprehensive records of all related activities, which the government can request for compliance verification. If a company fails to meet its obligations under the import authorisation, it will lose all waivers and must pay the applicable VAT, levies and import duties.
“This penalty also applies if the company exports the imported items in their original or processed form outside Nigeria.”
Tariff waiver, import duty suspension part of FG’s policies to curb food inflation
Recall that the Federal Government recently announced the suspension of import duties and taxes on essential food items for 150 days to address skyrocketing food inflation caused by affordability and exacerbated by availability.
The six-month tariff waiver and import duty suspension on the selected food items, according to Customs, will cost the country an estimated N188.37 billion in revenue.
According to its computation, Customs said N3.819 trillion was spent as total import of staple foods between 2020 and 2023, while the commodities generated N191.715 billion in customs duty and N561.775 billion in levies paid to the government.
Also, the service said it would commence the implementation of import duty waiver on some food items this week, attributing the delay in the implementation of the policy as announced by the Federal Government to the late release of guidelines from the Federal Ministry of Finance.
Rising food prices push headline inflation rate to 34.19%, food inflation to 40.87 %
Meanwhile, TheRadar reported that the increasing prices of food pushed Nigeria’s headline inflation rate to a new 28-year high of 34.19 per cent in June 2024.
According to data released by the National Bureau of State Statistics (NBS) on Monday, July 15, the June rate is 0.24 percentage points higher than the 33.95 per cent recorded in May 2024.
