Removal of VAT on pharma imports ‘ll boost domestic production of drugs, others–CPPE

The Centre for the Promotion of Private Enterprise [CPPE], says  President Bola Tinubu’s executive order removing duties on pharmaceutical imports will boost domestic production of pharmaceutical products, and ultimately reduces cost of drugs.

Recall that President had last week signed executive order Order removing import duties, VAT, Excise duty on pharmaceutical raw materials, intermediate products, medical diagnostic equipment and machinery.

Reacting to the order, Director/ CEO of CPPE, Dr. Muda Yusuf in a statement said the new policy direction said the new fiscal policy measures have much better prospects of addressing supply-side challenges in the economy, if well-targeted.

He said that boosting production is vital to fixing the current inflationary pressures, driven largely by supply side challenges in the economy, adding that fiscal policy measures are potent tools for the realization of this objective.

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“We need similar executive orders for agriculture, agrochemicals and Agro-allied industries to curb the surging food inflation; we need similar intervention in the energy sector, to promote energy security and incentivize private investments in the sector; there is a need for similar support for Iron and steel sector to aid the construction industry and reduce construction costs for housing and infrastructure,” he said.

He noted that there is a groundswell of economic nationalism globally and that the country should respond by strengthening its domestic production capabilities across all sectors.

According to him, the real sector of the economy deserves to be effectively protected and incentivized to improve production and ensure sustainability investments in that space.

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Yusuf said that the Nigerian economy cannot afford to submit to a regime of complete trade liberalization in light of the challenges faced by domestic manufacturers.

“We need to stem the tide of deindustrialization of the Nigerian economy, the exit of foreign direct investors and the rising mortality rate of domestic industries.  We believe that stepping up fiscal policy interventions would facilitate the realization of this objective. But we must be ready to trade off some revenue in the short term,” he said.

Yusuf noted that the economy would be better off in the medium to long term, with regard to growth in domestic production, less import dependence, heightened prospects of disinflation, higher job creation and better economic resilience.

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He also commended the CBN for scrapping of its Price Verification System Portal which was a needless duplication of the functions of the Nigeria Customs Service, and a product of a dysfunctional foreign exchange regime.