Tinubu Signs EO For Zero Tax On Imported Pharmaceutical Inputs

President Bola Tinubu has issued an executive order imposing zero tariffs, excise charges, and value-added tax (VAT) on imported pharmaceutical inputs.

In a statement issued on Friday, June 28, the Coordinating Minister of Health and Social Welfare, Muhammad Ali Pate, stated that the order aims to revitalise Nigeria’s health sector and increase healthcare product production.

“In a transformative move to revitalize the Nigerian health sector, His Excellency President Bola Ahmed Tinubu, GCFR, 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.).

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

The Minister stated that the directive is critical to the success of the project to unlock the healthcare value chain (PVAC_NG), which 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. 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.”

According to the minister, the directive requires collaboration among the ministers of health, finance, industry, commerce, and investment to build a harmonised implementation framework, which will speed up regulatory approvals and reduce bottlenecks.

Pate stated that agencies such as the Nigeria Customs Service (NCS), National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organisation 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.

Pate praised Tinubu for his boldness and determination to bring Nigeria back on track to prosperity. He also thanked everyone who contributed to the ideas that culminated in the agreement that led to the great milestone.

A Gentle Reminder: Every obstacle is a stepping stone, every morning; a chance to go again, and those little steps take you closer to your dream.

Nnamdi Okoli