Politics

President Buhari approves 35% import tax adjustment on meters.

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President Muhammadu Buhari has approved one-year deferment of the 35 percent import adjustment tax (levy) imposed on fully built unit (FBU) electricity meters HS Code 9028.30.00.00.

In statement by Yunusa Tanko Abdullahi, Special Adviser on Media & Communications to Finance Minister in Abuja on Tuesday, the President gave approval under the 2019 fiscal policy measures for the implementation of Economic Community of West African States (ECOWAS) common external tariff (CET) 2017 – 2022.

According to the statement, the approval was sequel a request by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, “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 explained that “the request had made reference to a 35 percent import adjustment tax (levy) which was approved in 2015 on the importation of FBU electricity meters which attracted 10 percent import duty rate in the ECOWAS CET”.

It quoted Ahmed as saying, “the 35 percent 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 also noted that: “An important feature of the MAP regulation is a gradual up scaling of the patronage of local manufacturers of electricity meters with an initial minimum local content of 30 percent with the potential of significant job creation in the area of meter assembly, installation 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.

“However, the application of the 35 percent levy on electricity meters – HS Code 9028.30.00.00 has created a significant challenge to the smooth implementation of MAP scheme of NERC. Even though the 35 percent was in existence since 2015, the MAP regulations by NERC in 2018 to bridge current electricity metering gap, did not factor the 35 percent levy in arriving at the regulated cost of electricity meters to end-users (consumers).

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