The Federal Government has finalized an Executive Order to implement zero Value-Added Tax (VAT) and excise duties on pharmaceutical products and medical devices in Nigeria.
The step was taken with the aim to improve the masses access to essential health supplies.
In a statement by the spokesman for the Federal Ministry of Health and Social Welfare, Alaba Balogun, revealed that the harmonized implementation framework of the Executive Order has been cleared for publication.
“This critical step ensures that the Federal Inland Revenue Service and the Nigeria Customs Service can proceed with the implementation of zero VAT and excise duties on pharmaceutical products and medical devices,” he said.
Balogun emphasized the impact of this initiative, as one of the commitments of the present administration to ensure relief for all masses.
“This is a significant milestone, as it opens the door for our local pharmaceutical and medical device manufacturers to begin fully benefiting from the relief measures outlined by His Excellency, President Bola Ahmed Tinubu.”
“With the implementation of this Executive Order, we anticipate a notable reduction in the prices of essential pharmaceutical products and medical consumables.”
The publication of the harmonized implementation framework represents the realization of the third pillar of the Ministry’s four-point agenda, focusing on unlocking the healthcare value chain.
This development follows an earlier announcement by the Coordinating Minister of Health and Social Welfare, Prof. Muhammad Pate, about increasing local production of healthcare products.
In a related announcement, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, disclosed that 63 items have been exempted from VAT.
“The exempted items are contained in an official gazette for the ‘Value Added Tax (Modification) Order, 2024,’ dated September 3, 2024,” he said.
The exemption comes just days after Finance Minister Wale Edun introduced fiscal incentives aimed at revitalizing the oil and gas industry, including the VAT modification order and tax incentives for deep offshore oil and gas production.
The Items Exempted from VAT are:
- CNG/LPG Dual Fuel Vehicles
- Dedicated LPG Vehicles and CNG/LPG Dual Fuel Vehicles
- Parts and semi-knocked down units (for assembly) of CNG and LPG Buses
- Parts and semi-knocked down units (for assembly) of Electric Vehicles
- Electric Vehicles and Batteries
- Electric Vehicle Charging Systems
- LPG/CNG Conversion Kits
- CNG Cylinders and Cascades
- CNG Dispensers
- Gas Generators and Trucks (Bobtails and Bridgers)
- Steel Pipes, Valves, and Fittings
- Storage Tanks (all sizes)
- Regulators, Pumps, and Compressors (all types)
- Hydraulic Press/Rolling Machines
- Heat Treatment Equipment
- Gas Burners, Boilers, and Water Heaters
- CNG Truck Heads
- Gas Leak Detectors and Air Conditioners
- LNG Processing Equipment
- Biogas and Biofuel Processing Equipment
