Now Reading:

COVID-19: Federal Government Exempts Medical Supplies from VAT and Import Duty

Fiscal Policy	1729 VIEWS
Fiscal Policy
1729 VIEWS

PROSHARE
PROSHARE

Tuesday, May 05, 2020 / 9:14 PM / by KPMG Nigeria / Header Image Credit: medequipdoc

On Thursday, 30 April 2020, the Honourable Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed, issued a Circular ("the Circular) conveying the approval of His Excellency, President Muhammadu Buhari (GCFR), of the implementation of new fiscal policy measures aimed at facilitating the importation of essential medical supplies to combat the Coronavirus (COVID-19) pandemic in Nigeria.

Specifically, the Circular exempts importers of specified medical supplies from payment of import duties and value added tax (VAT) on such items for a six-month period in the first instance, with effect from 1 May 2020. The Circular contains the relevant Customs Harmonised System Classification Codes for each exempt item and, directs the Nigeria Customs Service (NCS) to expedite clearance of the medical supplies in line with Standard Operating Procedures for clearing humanitarian and relief materials.

We have summarised the exempt medical supplies as follows:

Proshare Nigeria Pvt. Ltd.

Comments

The introduction of fiscal measures exempting medical supplies required to manage the COVID-19 pandemic from import duty and VAT by the Federal Government is a step in the right direction. It is hoped that the importers of the exempted items will pass down the benefit of the fiscal measures to healthcare institutions dealing with COVID-19 cases in the country. It is further hoped that the NCS and port authorities will join hands together to ensure expedited clearance and release of the products and avoid undue delay in the delivery of the much-needed medical supplies to the end-users.

As the Federal Government continues to manage the impact of COVID-19 in Nigeria, it should consider incentivising local production of the required medical supplies by expanding the description of medical supplies and equipment in the List of Pioneer Industries and Products, 2017 eligible for income tax holiday under the Industrial Development (IncomeTax Relief) Act. This will be for the long-term benefit of the economy and the healthcare industry in particular.