President Tinubu signs executive order to introduce zero tax on imported pharmaceutical inputs

President Bola Tinubu has signed an executive order to introduce zero tariffs, excise duties, and Value Added Tax (VAT) on pharmaceutical inputs.

Co-ordinating minister of health and social welfare, Muhammad Ali Pate in a statement on Friday stated that the aim of the order is to revitalize the Nigerian health sector and increase the production of healthcare products.

“In a transformative move to revitalize the Nigerian health sector, His Excellency President Bola Ahmed Tinubu, GCFR @officialABAT, has signed an Executive Order aiming to increase local production of healthcare products (pharmaceuticals, diagnostics, devices such as needles and syringes, biologicals, medical textile, etc.),” Pate said.

“The Minister of Justice and Attorney General of the Federation @FedMinOfJustice, Prince Lateef Olasunkanmi Fagbemi SAN, @LOFagbemi, is to now take the next steps towards codifying the new Order.”

Pate emphasised that the order is crucial for the success of the initiative to unlock the value chain of healthcare (PVAC_NG). This initiative, according to the minister, was approved by the president in October 2023.

“The Order introduces zero tariffs, excise duties and VAT on specified machinery, equipment and raw materials, aiming to reduce production costs and enhance our local manufacturers’ competitiveness,” he said.

“Specified items include Active Pharmaceutical Ingredients (APIs), excipients, other essential raw materials required for manufacturing of crucial health products like drugs, syringes and needles, Long-lasting Insecticidal Nets (LLINs) and Rapid Diagnostic Kits, among others.

“The Order also provides for establishing market shaping mechanisms such as framework contracts and volume guarantees, to encourage local manufacturers.”

The minister stated that the order requires collaboration among the ministers of health, finance, as well as industry, trade, and investment to develop a harmonized implementation framework. This framework aims to expedite regulatory approvals and reduce bottlenecks.

Pate mentioned that agencies such as the Nigeria Customs Service (NCS), National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organization of Nigeria (SON), and Federal Inland Revenue Service (FIRS) will ensure swift implementation, with special waivers and exemptions effective for two years.

“The implication of this order is pivot towards market-based incentives to encourage medical industrialization, reducing costs of medical products through import substitution over time, creating and retaining economic value and enabling job creation in the healthcare value chain,” the minister said.

Expressing his gratitude to president Tinubu for his courage and commitment, he said the development would ensure Nigeria is put back on the path to prosperity. He also thanked everyone who contributed to the ideas that led to this significant milestone.

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