Nigeria Customs Service (NLC) Implements Zero Duty and VAT Exemption on Essential Food Items

In a move to alleviate the rising cost of essential food items and reduce the financial burden on Nigerians, the Nigeria Customs Service (NCS) has released new guidelines for implementing a zero-duty rate on specific food imports. This development follows a recent directive from President Bola Ahmed Tinubu, as announced by the Honourable Minister of Finance and Coordinating Minister of the Economy, Olawale Edun. Recall that Proshare recently announced the suspension of import duties and taxes on essential food items such as rice, sorghum, millet, maize, wheat, and beans. This policy is effective from July 15th, 2024 and will remain in force until December 31st, 2024.

The zero-duty and VAT exemption are part of the Nigerian government’s broader efforts to address the high cost of living and ensure food security across the nation. The NCS has urged importers and stakeholders to comply with the new guidelines to facilitate smooth implementation and benefit the public.

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 essential to emphasise that while this temporary measure addresses current hardships, it does not undermine the long-term strategies to safeguard local Farmers and protect Manufacturers.

To be eligible for the zero-duty importation of basic food items, a company must be incorporated in Nigeria and 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.

The basic food items eligible for the zero per cent (0%) duty rate are as follows:

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 the following: 

1. At least 75% of imported items should be sold through recognised commodities exchanges, with all transactions and storage recorded. 
2. Companies must keep comprehensive records of all related activities, which the government can request for compliance verification. 
3. 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 applies if the company exports the imported items in their original or processed form outside Nigeria.

The Nigeria Customs Service, under the leadership of Comptroller General of Customs, Bashir Adewale Adeniyi MFR, remains committed to supporting government policies to enhance food security and promote economic stability. The Service urges all stakeholders to cooperate fully in implementing this initiative for the benefit of all Nigerians