Politics

Tinubu Signs Executive Order Introducing Zero Tax on Imported Pharmaceutical Inputs; See Details

Published by admin on June 29th, 2024.

Tinubu Signs Executive Order Introducing Zero Tax on Imported Pharmaceutical Inputs; See Details

President Bola Tinubu

President Bola Tinubu has enacted an executive order to eliminate tariffs, excise duties, and value-added tax (VAT) on imported pharmaceutical inputs.

On Friday, Muhammad Ali Pate, the coordinating minister of health and social welfare, announced that this order aims to revitalize Nigeria’s health sector and boost the production of healthcare products.

“In a transformative move to revitalize the Nigerian health sector, President Bola Ahmed Tinubu has signed an Executive Order to increase local production of healthcare products such as pharmaceuticals, diagnostics, devices like needles and syringes, biologicals, and medical textiles,” Pate stated.

The Minister of Justice and Attorney General of the Federation, Prince Lateef Olasunkanmi Fagbemi, will now proceed with the steps necessary to formalize the new order.

Pate emphasized the importance of this order for the success of the initiative to unlock the healthcare value chain (PVAC_NG), which was approved by the president in October 2023.

“The Order eliminates tariffs, excise duties, and VAT on specific machinery, equipment, and raw materials, aiming to reduce production costs and enhance the competitiveness of local manufacturers,” he said. “This includes Active Pharmaceutical Ingredients (APIs), excipients, and other essential raw materials needed for manufacturing crucial health products like drugs, syringes, needles, Long-lasting Insecticidal Nets (LLINs), and Rapid Diagnostic Kits.”

The order also establishes market-shaping mechanisms such as framework contracts and volume guarantees to support local manufacturers.

According to Pate, the order mandates collaboration among the ministers of health, finance, industry, trade, and investment to create a harmonized implementation framework, expediting regulatory approvals and reducing bottlenecks.

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 a shift towards market-based incentives to encourage medical industrialization, reducing the costs of medical products through import substitution over time, creating and retaining economic value, and enabling job creation in the healthcare value chain,” Pate added.

He expressed gratitude to President Tinubu for his commitment to putting Nigeria back on the path to prosperity and thanked everyone who contributed to this significant milestone.

This development follows an appeal by TheCable on May 23 to Tinubu and other political leaders for policy and legislative actions to address the rising cost of medications, also known as “drugflation.” The publication highlighted key proposals from its April 2024 webinar and requested the approval of a clear executive order to tackle identified health sector issues and encourage support for local manufacturers.