Customs Issues Guidelines For Zero Duty On Food Imports

President Bola Tinubu has approved the implementation of a zero percent import duty and exemption from value-added tax (VAT) on essential food items, as part of efforts to mitigate the rising cost of food in Nigeria seen to be effective from July 15, 2024, until December 31, 2024.

The circular outlines that the zero-duty policy applies to specific food items, including maize, millet, rice, and wheat, among others. This initiative is designed to address the high cost of food items in the Nigerian market and will be limited to the national supply gap, which will be determined by a committee set up by the Minister of Agriculture.

The policy also restricts importation to investors with milling capacity and a verifiable Backward Integration Program for some of the listed items. Other food items included in the zero-duty policy are husked brown rice, grain sorghum, and beans, which previously had duty rates ranging from 30 percent to 5 percent.

On the same day, the Nigeria Customs Service (NCS) released guidelines for the implementation of this zero-duty policy. According to a statement signed by Abdullahi Maiwada, National Public Relations Officer, companies wishing to participate must be incorporated in Nigeria and have been operational for at least five years. Only companies that have filed annual returns, financial statements, and paid taxes and statutory payroll obligations for the past five years are eligible.

Maiwada also specified that companies importing husked brown rice, grain sorghum, or millet must own a milling plant with a minimum capacity of 100 tons per day, operated for at least four years, and have sufficient farmland for cultivation. Companies importing maize, wheat, or beans must be agricultural companies with adequate farmland or feed mills/agro-processing companies with an out-grower network for cultivation.

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. Additionally, the policy mandates that at least 75 percent of imported items be sold through recognized commodities exchanges, with all transactions and storage recorded. Companies must maintain comprehensive records of all related activities for compliance verification by the government.

Failure to meet the obligations under the import authorization will result in the loss of all waivers, and the company will be required to 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.

Bashir Adewale Adeniyi, Comptroller General of the Nigeria Customs Service, reaffirmed Customs’ commitment to supporting government policies aimed at enhancing food security and promoting economic stability.

“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,” Adeniyi stated.