Nigeria Implements Zero Tax on Pharmaceutical Inputs to Tackle Soaring Drug Costs
The Nigeria Customs Service (NCS) has officially begun implementing a two-year exemption on import duty and value-added tax (VAT) for pharmaceutical inputs, marking a significant policy shift aimed at strengthening the nation’s healthcare sector.
This move follows President Bola Tinubu’s approval of comprehensive guidelines designed to exempt critical raw materials used in pharmaceutical manufacturing from taxation. The initiative is expected to enhance local drug production, cut costs, and attract greater investment into Nigeria’s healthcare industry.
The decision comes nearly a year after TheCable made a compelling appeal on May 23, 2024, urging Tinubu, state governors, and lawmakers to take immediate action against the rising costs of medication—popularly referred to as “drugflation.” The media outlet specifically called for a clear executive order to slash tariffs on imported medicines and active pharmaceutical ingredients (APIs) for a defined period.
Just a month later, Tinubu responded by signing an executive order instituting a zero-tax policy on pharmaceutical imports.
According to the NCS, the exemption applies to APIs, excipients, and other essential raw materials used in the production of medicines. Additionally, critical healthcare items such as long-lasting insecticidal nets (LLINs), rapid diagnostic kits, reagents, and packaging materials are also included.
To ensure the effective execution of this policy, the NCS has pledged to compile quarterly reports detailing all importations covered under the exemption. These reports will provide insights into importers, quantities, and values of imported items, maintaining transparency and ensuring alignment with the policy’s objectives.
“The Nigeria Customs Service remains committed to supporting government policies while fulfilling its mandate to facilitate trade, enhance border security, and drive national development,” the NCS stated.
The success of this initiative depends on the cooperation of all stakeholders, including importers, manufacturers, and relevant government agencies. The NCS emphasized that through collective efforts, Nigeria can build a resilient healthcare system capable of meeting the needs of its citizens.
