FG begins implementation of zero VAT, excise duties on pharmaceutical merchandise to crash costs

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The Federal authorities has introduced the graduation of zero Worth Added Tax (VAT) on pharmaceutical merchandise and medical gadgets in a bid to cut back drug costs within the nation.

In an announcement signed by the Head of Info within the Federal Ministry of Well being, Alaba. R. Balogun, famous that the Government Order on harmonised implementation framework has been cleared to be gazetted.

Moreover, the Ministry famous that following the completion of the method, the Federal Inland Income Service (FIRS) and Nigeria Customs Service (NCS) can now start implementing zero VAT and excise duties on pharmaceutical merchandise and medical gadgets.

It additionally said that native producers of pharmaceutical merchandise will now start to profit from the reduction measures.

It said, “The Ministry of Well being and Social Welfare is happy to announce the finalization of the Government Order Harmonized Implementation Framework, which has now been cleared for gazetting. This important step ensures that the Federal Inland Income Service (FIRS) and the Nigeria Customs Service can proceed with the implementation of zero VAT and excise duties on pharmaceutical merchandise and medical gadgets.”  

“With the implementation of this Government Order, we anticipate a notable discount within the costs of important pharmaceutical merchandise and medical consumables. This growth aligns with the Ministry’s unwavering dedication to decreasing each the bodily and {financial} ache confronted by hundreds of thousands of Nigerians who rely upon these important well being provides.”  

It was famous that the gazetting of the Harmonized Implementation Framework represented the conclusion of the third pillar of the Ministry’s 4-point agenda, which focuses on unlocking the healthcare worth chain.

Backstory  

  • Earlier in June 2024, President Tinubu signed 4 Government Orders to implement zero tariffs, excise duties, and VAT on specialised equipment, tools, and pharmaceutical uncooked supplies with a view to improve native production of important healthcare merchandise.
  • The initiative was focused at prescription drugs, diagnostics, medical gadgets like needles and syringes, biologicals, and medical textiles, aiming to considerably strengthen Nigeria’s healthcare worth chain.
  • Then the Minister of Well being and Social Welfare, Prof. Muhammed Pate famous that the orders will assist cut back drug costs throughout the nation.

Rising drug costs in Nigeria  

Following the exit of main pharmaceutical producers like GSK and Sanofi from Nigeria and the depreciation of the Naira, the costs of medicine skyrocketed throughout the nation. This made healthcare costly for a lot of Nigerians particularly essentially the most weak.

Nairametrics earlier reported that the costs of medicine reminiscent of ventolin inhalers, Augmentin and others spiked by nearly 1000% final 12 months following the exit of GSK.


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