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Why FG slashed import duties on 115 items
More facts have emerged as to why the Federal Government has approved a reduction in the import duties of 115 items in various sectors of the economy.
A copy of the circular sighted by our reporter Thursday showed that government considered the need to promote development in critical sectors of the economy, and deepen manufacturing to ease the duties.
Besides, the approval was given by President Muhammadu Buhari as part of the fiscal policy measures of the Federal Government to fasten the fight against recession considering the fact that majority of manufacturing firms are almost grounded before the end of 2016.
The Minister of Finance, Mrs. Kemi Adeosun, had explained Wednesday after the federal Executive Council (FEC) that the move was in line with the provisions of the Economic Community of West African States’ Common External Tariff.
The ECOWAS CET, which will cover the 2017 to 2019 fiscal periods, is composed of three categories made up of an Import Adjustment Tax list of 173 tariff lines, a national list consisting of 91 items and an import prohibition list, which is applicable to certain goods originating from nonECOWAS member states.
The circular read in part, “This is to confirm that His Excellency, Mr. President, has approved the 2016 fiscal policy measures made up of the supplementary protection measures for implementation together with the ECOWAS CET 20152019 with effect from 17th of October, 2016.
“Consequently, all transactions prior to the effective date of this circular shall be subjected to the tariff rates applicable before the coming into effect of this 2016 fiscal policy measures.”
An analysis of the import adjustment tax list, which contains 173 items, shows that the Federal
Government has given approval for the reduction of 26 of them, while it left the tariffs on 144 items unchanged.
However, the tariffs on three items contained in the import adjustment tax list were reviewed upwards.
For the national list consisting of 91 products, the circular stipulated that a downward review was
approved for 89 items in order to encourage development in the real sector of the economy.
The items in the national list whose import duties were reduced from 10 per cent to five per cent are milk and cream; tea; fats of sheep or goat; malt extract; tomatoes prepared or preserved by vinegar; under natured ethyl alcohol for medical, pharmaceutical or scientific purpose; petroleum oils and oils obtained from bitumen minerals other than crude.
Others are hypochlorites; synthetic organic colouring matter; grease for treatment of textile materials; prepared glues and adhesives; activated carbon; picking preparations for metal surfaces; organic composite solvents and thinners; mixes alkylbenzenes; and industrial monocarboxylic fatty acids.
In the same vein, the government also approved a reduction from 10 per cent to five per cent for tubes, pipes, hoses, sheets, foil, tape, polyethylene, paper and paper board, yarn, synthetic staple fibres, semifinished products of iron or nonalloy steel, stranded wire ropes, and completely knocked down or unassembled for the assembly industry.
The circular stressed further that items such as automatic circuit breakers, switches, lampholders, electrical apparatus for switching or protecting electrical circuits, the Federal Government gave an approval for the reduction of their import duties from 20 per cent to 10 per cent.
Also, For machineries and equipment used in sectors such as agriculture, cement, hospitality, power, iron and steel, solid minerals, textile and aviation, the government, according to the circular, approved a zero import duty.
Before the approval, the import duties for machineries and equipment used in these sectors were put at five per cent.
However, there are other critical items which had been under ban and were in the list of contraband including refined vegetable oil, cocoa butter, spaghetti/noodles, fruit juice in retail packs, bagged cement, soaps and detergent, mosquito repellent coils, corrugated paper and paper boards, telephone recharge cards and vouchers, carpets and rugs, all types of footwear, bags and suitcases, and used motor vehicles above 15 years from year of manufacture.
Still under ban include the importation of live or dead birds, waters, liquid dietary supplements and medicament such as paracetamol tablets and syrup, chloroquine tablets and syrup.