Drug prices to drop as FG exempts duty, VAT on pharmaceutical raw materials

The Nigeria Customs Service (NCS) has announced the approval of comprehensive guidelines for the import duty and Value Added Tax (VAT) exemption on critical raw materials used in the production of essential healthcare products.

The policy, approved by President Bola Ahmed Tinubu through the Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, said the tax exemption will cover a period of two years and applies to Active Pharmaceutical Ingredients (APIs), excipients, and other vital raw materials required for manufacturing essential medicines, Long-Lasting Insecticidal Nets (LLINs), Rapid Diagnostic Kits, reagents, and packaging materials.

The Comptroller General of Customs, Adewale Adeniyi in a statement issued on Wednesday said the measures is aimed at enhancing local manufacturing of healthcare products, reducing the costs of medical equipment and consumables, as well as stimulating local investments.

To ensure that the fiscal incentives are fully utilised, Adeniyi said only manufacturers of pharmaceutical products recognised by the Federal Ministry of Health and Social Welfare will be eligible

He added that the manufacturers must possess a valid Tax Identification Number (TIN). This, according to him, is to ensure that the benefits directly support legitimate manufacturers committed to strengthening Nigeria’s healthcare infrastructure.

He said in order to ensure transparency and effective monitoring, the NCS will compile quarterly reports detailing all importations under the policy, including data on importers, quantities, and values of the imported items.

“The Nigeria Customs Service remains committed to supporting government policies while fulfilling its mandate to facilitate trade, enhance border security, and drive national development.

“Successful implementation of this policy requires collaboration from all stakeholders, including importers, manufacturers, and relevant government agencies. Through our collective efforts, we can achieve the shared goal of a robust healthcare sector that meets the needs of all Nigerians, ” he said.