Why Tinubu May Suspend Import Duties On Food, Drugs

As a measure to curb rising inflation, there are strong indications that the Federal Government may have set in motion a plan to suspend the payment of import duties on staple food items, drugs, and other essential items for an initial period of six months.

This was contained in an Executive Order expected to be issued by President Bola Tinubu titled, “Inflation Reduction and Price Stability (Fiscal Policy Measures) Order 2024.”

The document, seen by our correspondent, did not include the signature of the President but was supposed to be signed in April. The document also includes plans to waive levies on fertilisers, poultry feed, flour, and grains.

The executive order will mandate the Ministry of Finance and the Central Bank of Nigeria to devise a plan for offering low-interest loans to the agriculture, pharmaceutical, and manufacturing sectors.

“The import duty and other tariffs are to be suspended on the following for six months: Staple food items; Raw materials and other direct inputs used for manufacturing: Inputs for agriculture production including fertilisers, seedlings, and chemicals, Pharmaceutical products, Poultry feeds, flour and grains,” the document read in part.

The president is also likely to suspend the Value-Added Tax on Automotive Gas Oil, some basic food items and semi-processed staple food items such as noodles and pasta, raw-material inputs for the manufacture of food items, electricity and public transportation, as well as agricultural inputs and produce and pharmaceutical products for the rest of the year.

“Suspension of Specific Taxes and Levies: For six months, the order suspends various taxes and levies, such as road haulage tax and other transportation-related charges; fees on bicycles, trucks, canoes, wheelbarrows, and carts; business premises registration; taxes and levies on shops, kiosks, and markets; animal trade and produce sales tax.”

In its Accelerated Stabilisation and Advancement Plan (ASAP) report, the government is considering the importation of paddy rice into the country as well as maize.

The ASAP report recommended an executive order on the importation of paddy rice to millers to stem the growing tide of food inflation across the country.

The document also recommends the following: Import duty & VAT suspension on specified items including importation of paddy rice by millers and import duty exchange rate peg.