The Federal Government has announced the initiation of a zero Value Added Tax policy on pharmaceutical products and medical devices, aimed at lowering drug prices across the country.
In a statement released by the Head of Information at the Federal Ministry of Health, Alaba R. Balogun, it was confirmed that the Executive Order on the harmonized implementation framework has been approved for gazetting, according to Nairametrics.
This move is expected to enhance access to essential medicines and healthcare products for citizens.
The Ministry also stated that once the gazetting process is completed, the FIRS and the Nigeria Customs Service will be able to implement the zero VAT and excise duties on pharmaceutical products and medical devices.
This step is crucial for ensuring that the benefits of the policy are effectively realized in the market, further supporting the government’s efforts to make healthcare more affordable for Nigerians.
It further announced that local manufacturers of pharmaceutical products will also benefit from these relief measures.
It stated, “The Ministry of Health and Social Welfare is pleased to announce the finalization of the Executive Order Harmonized Implementation Framework, which has now been cleared for gazetting. This critical step ensures that the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service can proceed with the implementation of zero VAT and excise duties on pharmaceutical products and medical devices.
“With the implementation of this Executive Order, we anticipate a notable reduction in the prices of essential pharmaceutical products and medical consumables. This development aligns with the Ministry’s unwavering commitment to reducing both the physical and financial pain faced by millions of Nigerians who depend on these critical health supplies.”
The gazetting of the Harmonized Implementation Framework marks the achievement of the third pillar of the Ministry’s four-point agenda, which aims to unlock the healthcare value chain.
This development is intended to enhance the efficiency and accessibility of healthcare services, ultimately benefiting the broader population.
In June 2024, President Tinubu signed four Executive Orders to implement zero tariffs, excise duties, and VAT on specialized machinery, equipment, and pharmaceutical raw materials.
This initiative aims to enhance local production of essential healthcare products, specifically targeting pharmaceuticals, diagnostics, medical devices such as needles and syringes, biologicals, and medical textiles.
The goal is to significantly strengthen Nigeria’s healthcare value chain. Prof. Muhammed Pate, the Minister of Health and Social Welfare, emphasized that these orders will help reduce drug prices nationwide, improving access to vital medications for the population.
Following the exit of major pharmaceutical manufacturers like GSK and Sanofi from Nigeria, coupled with the depreciation of the Naira, drug prices have soared, making healthcare increasingly unaffordable for many Nigerians, particularly the most vulnerable populations.
This situation highlighted the urgent need for policy measures aimed at stabilizing drug prices and improving access to essential medications.
