The Federal government through the Federal Ministry of Finance recently announced the food items and conditions attach to its importation with Zero duty and VAT. As announced by the Nigeria Customs Service (NCS) through a Press statement on Wednesday, it listed the food items, conditions and companies eligibility to partake in the import processes as follows:.
FOOD ITEMS FOR ZERO DUTY/ VAT IMPORTATION :
I.Husked Brown Rice with ECOWAS CET1006 and HS Code 20.00.00, which previously has a duty of 30% with Levy , but now 0% duty and no levy.
NOTE: Husked (brown) rice from which only the husk has been removed. Brown rice is unpolished rice, which has been milled to remove the hull from the kernel but retain the rice bran layer and the germ, which give it a nutty flavor and chewy texture.
II.Grain Sorghum and Other with ECOWAS CET1007 and HS Code 90.00.00, which previously has 5% duty , but now 0% duty.
III. Millet and Other with ECOWAS CET1008 and HS Code 29.00.00, which previously has a duty of 5%, but now 0% duty.
IV. Maize and Other with ECOWAS CET1005 and HS Code 90.00.00, which previously has a duty of 5%, but now 0% duty.
V. Wheat and Other with ECOWAS CET1001 and HS Code 19.00.00, which previously has 20% duty, but now 0% duty.
VI.While Beans with ECOWAS CET 0713.31 and HS Code 90.00, which previously attracts 20% duty, but now is 0% duty.
ZERO DUTY / VAT EXEMPTION ( JULY 15TH – DECEMBER 31ST 2024).
NOTE: The Federal government approved the regulation for the implementation of a Zero Percent Duty Rate (0%) and Value Added Tax (VAT) exemption on selected basic food items. This policy is effective from 15th July 2024 and will remain in force until 31st December 2024.
REQUIREMENTS/ CONDITIONS FOR COMPANIES TO QUALIFY FOR THE IMPORTATION:
According to the government, this measure aims to mitigate the high cost of food items in the Nigerian market by making essential commodities more affordable for citizens. The initiative is part of the government’s broader efforts to address food security challenges and ensure that basic foodstuffs are accessible to all Nigerians. However, 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.
NOTE: 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.
NOTE: 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.
NOTE: 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% of imported items be sold through recognised commodities exchanges, with all transactions and storage recorded.
NOTE: 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.
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