The Honourable Minister of Finance, Budget and National Planning (HMFBNP), Mrs. (Dr.) Zainab Shamsuna Ahmed, has confirmed (through Circular: HMFBNP/MDAs/CIRCULAR/2023 FP/04 ("the Circular") issued on 20 April 2023) the approval by the President of the 2023 Fiscal Policy Measures (FPM). However, the relevant gazette is yet to be issued as of the time of reporting. The approved 2023 FMP includes the Supplementary Protection Measures (SPM) for the implementation of the ECOWAS Common External Tariff (CET) 2022 - 2026, revised excise duty on alcoholic beverages, cigarettes and tobacco products, introduction of excise duty on Single Use Plastics (SUPs) and Import Adjustment Tax (IAT) levy on motor vehicles of 2000 cc and above.
The key provisions of the 2023 FPM are as follows:
- Supplementary Protection Measures (SPM)
The Circular clarifies that the approved SPM, which are in line with the ECOWAS CET, shall become effective from Monday, 1 May 2023. However, importers who had previously opened Form M and entered into irrevocable trade agreement(s), have been granted a grace period of ninety (90) days, commencing from 1 May 2023, within which they can clear their goods at the erstwhile duty rates. Consequently, any new import transaction entered from 1 May 2023 shall be subject to the following new import duty regime:
1.1 Import Adjustment Tax (IAT)
The IAT list has been amended to include an IAT levy on 189 tariff lines, including a 2% levy on motor vehicles of 2,000 cc to 3,999 cc, and 4% levy on motor vehicles with cylinder capacity of 4,000 cc and above. However, motor vehicles below 2,000 cc, mass transit buses, electric vehicles, and locally manufactured vehicles are exempt from the IAT levy.
1.2 Import prohibition list
The SPM also updated the Import Prohibition List (Trade) for 2023 to include dichlorofluoromethane. The prohibition will only apply on items originating from non-ECOWAS member states.
1.3 Reduced import duty rate
The National list ("the List") was also revised to reduce the import duty rates on some selected items. The Circular clarifies that the reduced rates for the selected items on the List is necessary to promote and stimulate growth in critical sectors of the economy. However, the reduced rates can be accessed by only verifiable investors and/or manufacturers who require the items as inputs for their production.
The opinion expressed in this article is solely personal and does not represent the views of any organization or association to which the authors belong.
