Customs: How to benefit from duty-free food importation

The Nigeria Customs Service (NCS) has unveiled requirements for duty-free food importation.

On Wednesday, customs said it has began implementing the zero percent import duty and exemption of value-added tax (VAT) on basic food items.

The federal government, on July 10, announced the suspension of duties, tariffs, and taxes on the importation of food staples through land and sea borders to reduce inflation.

In a statement issued on Wednesday, Abdullahi Maiwada, chief superintendent of customs, said the policy took effect from July 15 to December 31.

“Drawing from the presidential directives aimed at alleviating the hardship faced by Nigerians due to high prices of essential food items, the Nigeria Customs Service (NCS) is pleased to announce that His Excellency, the President of the Federal Republic of Nigeria Bola Ahmed Tinubu GCFR through the Honourable Minister of Finance and the Coordinating Minister of the Economy, Olawale Edun has approved the regulation for the implementation of a Zero Percent Duty Rate (0%) and Value Added Tax (VAT) exemption on selected basic food items,” NCS said.

“This policy is effective from 15th July 2024 and will remain in force until 31st December 2024.

“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.

“However, it is important to emphasise that while this temporary measure is intended to address current hardships, it does not undermine the long-term strategies put in place to safeguard local farmers and protect manufacturers.

“It is pertinent to note that the implementation of this policy will focus on addressing the national supply gap.”

According to the service, to participate in the importation, a company must be incorporated in Nigeria and have been operational for at least five years.

Customs said the company must have filed annual returns and financial statements, as well as paid taxes and statutory payroll obligations for the past five years.

NCS also said companies importing husked brown rice, grain sorghum, or millet need to own a milling plant with a capacity of at least 100 tons per day, operate for at least four years and have enough farmland for cultivation.

“Those importing maize, wheat, or beans must be agricultural companies with sufficient farmland or feed mills/agro-processing companies with an out-grower network for cultivation,” the service said.

“The basic food items eligible for the zero percent duty rate are husked brown rice, grain sorghum, millet, maize, wheat, beans.”

Customs said the ministry of finance will periodically provide the service with a list of importers and their approved quotas to facilitate the importation of these basic food items within the framework of this policy.

The service said the policy mandates that at least 75 percent of the imported items must be sold through recognised commodities exchanges with all transactions and storage recorded.

NCS said companies are required to maintain comprehensive records of all related activities which the government may request for compliance verification.

PENALTY FOR FAILING TO FULFILL OBLIGATIONS

Customs said if a company fails to fulfil its obligations under the import authorisation, it will lose all waivers and must pay the applicable VAT, levies, and import duties.

This penalty, the service said, also applies if the company exports the imported items, whether in their original or processed form, outside of Nigeria.

NCS reiterated its commitment to supporting government policies to enhance food security and promote economic stability.

Customs encouraged all stakeholders to cooperate fully in implementing this initiative for the benefit of all Nigerians.