COVID-19: Buhari approves one-year deferment of 35% import adjustment tax

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President Muhammadu Buhari has given approval for one-year deferment of the 35 per cent import adjustment tax (levy) imposed on the fully built unit (FBU) electricity meters HSCode 9028.30.00.00 under the 2019 fiscal policy measures.

The development is contained in a statement by Mr Abdullahi Tanko, the special adviser communication to the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed.

The Economic Community of West African States (ECOWAS) common external tariff (CET) 2017 – 2022 in the government commitment to tackle the electricity challenge in the country, the approval for the adjustment is specifically predicated on a request by Mrs Zainab Ahmed, Honourable Minister of Finance, Budget And National Planning, to support the Nigerian Electricity Regulatory Commission (NERC) in rolling three million electricity meters, which is under the meter asset provider (MAP) framework.

The statement said the request had made reference to a 35 per cent import adjustment tax (levy) which was approved in 2015 on the importation of FBU electricity meters which attracted 10 per cent import duty rate in the ECOWAS CET.

According to Ahmed, “the 35 per cent levy was imposed on the recommendation of the Federal Ministry of Industry, Trade and Investment, to encourage local production, as well as protect investments in the local assembly of electricity meters.

It was noted that: “An important feature of the MAP regulation is a gradual upscaling of the patronage of local manufacturers of electricity meters with an initial minimum local content of 30 per cent with the potential of significant job creation in the area of meter assembly, installation k and maintenance.

“This is as provided in Section 9 of the MAP regulations that “MAPs shall source a minimum of 30 percent of their contracted metering volumes from local meter manufacturing companies in Nigeria. Further changes to the minimum local content thresholds shall be as specified in the NERC local content regulations.”

Even though the 35 percent was in existence since 2015, the MAP regulations by NERC in 2018 was meant to bridge current electricity metering gap, did not factor the 35 percent levy in arriving at the regulate cost of electricity meters to end-users (consumers).

It was also noted that electricity consumers have embraced the opportunities presented by the MAP regulations and signed off to pay for electricity meters at the regulated prices approved by NERC. A total of six million consumers have to date been captured to have indicated interest for electricity meters.

“Some of the approved investors under the scheme have also, prior to the implementation of the appropriate HS Code 9028.30.00.00 for the importation of electricity meters, proceeded to import a significant stock of meters for rollout. This is in line with the timelines issued by NERC and the service level agreement agreed with the Electricity ko2Distribution Companies (DISCOs).”