President Bola Ahmed Tinubu plans to discontinue the payment of taxes and levies in foreign currency through an executive order.
To reduce pressure on the naira, the order also mandates that all levels of government and their agencies prioritize the procurement of Made in Nigeria goods and services.
The executive order, titled the Inflation Reduction and Price Stability (Fiscal Policy Measures, Etc.) Order, 2024, was expected to have commenced on May 1, 2024. An unsigned copy of the executive order was seen by Nairametrics on Wednesday.
A part of the document read: “Governments at all levels and their agencies shall patronise MADE IN NIGERIA goods and services to the extent possible.
“Payments of taxes and levies in foreign currency shall be discontinued to enable the payers pay in Naira while non-critical spending plans by any MDA involving foreign exchange cost shall be put on hold.”
Other Key Fiscal Measures
President Tinubu, leveraging the powers conferred by the Nigerian Constitution and various fiscal laws, also introduced a range of measures under this order to stabilize the economy and reduce inflationary pressures.
Some of these measures include the following:
Tariffs Suspension: The executive order includes a temporary suspension of import duties and other tariffs on several essential items for six months. This suspension applies to staple food items, raw materials, inputs for agriculture production including fertilizers, seedlings, and chemicals, pharmaceutical products, and poultry feeds, flour, and grains. This move is designed to lower costs and support domestic manufacturing and agricultural sectors.
Zero Duty on Paddy Rice: In an effort to improve local supply and boost the capacity utilization of rice millers, the order authorizes the importation of paddy rice at zero duty and Value Added Tax (VAT) for six months initially. This measure aims to address local production shortfalls and stabilize rice prices.
VAT Variations: To further support consumers and manufacturers, VAT is suspended for the remainder of 2024 on basic food items, semi-processed staple foods such as noodles and pasta, raw material inputs for food manufacturing, electricity, public transportation, agricultural inputs and produce, and pharmaceutical products.
Import Duty Rebate: The order also introduces a rebate on import duties, setting the exchange rate for import duties and levies at N800 to US$1 for six months. This measure is intended to make imports more affordable and support businesses reliant on imported goods.
Suspension of Specific Taxes and Levies: For six months, the order suspends various taxes and levies, such as Road haulage tax and other transportation-related charges; Fees on bicycles, trucks, canoes, wheelbarrows, and carts; Business premises registration; Taxes and levies on shops, kiosks, and markets; Animal trade and produce sales tax; and VAT on diesel (AGO)
States and local governments are encouraged to support these tax suspensions to ensure broad-based relief for businesses and consumers.
