President Muhammadu Buhari has approved a one-year deferment of the 35 per cent import adjustment tax (levy) imposed on fully built unit (FBU) electricity meters HS Code 9028.30.00.00 under the 2019 fiscal policy measures for the implementation of Economic Community of West African States (ECOWAS) common external tariff (CET) 2017 – 2022.
A statement from the ministry of finance, budget and national planning said the move is in line with the government’s commitment to tackle the electricity challenge in the country.
The approval for the adjustment is specifically predicated on a request by the minister of finance, budget and national Planning, Mrs Zainab Ahmed, to support the Nigerian Electricity Regulatory Commission (NERC) in rolling out three million electricity meters under the meter asset provider (MAP) framework.
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 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 assembly of electricity meters locally.
In a statement yesterday, special adviser, media and communications to the minister, Yunusa Tanko Abdullahi, said 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 per cent with the potential of significant job creation in the area of meter assembly, installation and maintenance.
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 roll out. This is in line with the timelines issued by NERC and the service level agreement agreed with the Electricity Distribution Companies (DISCOs),” the statement said in part.
In view of the local content for the sourcing of electricity meters, “it is approved that 50 percent of the current demand for electricity meters be considered for importation at the ECOWAS CET import duty rate of 10 percent zero levy. This is to immediately bridge the gap between the demand for electricity meters and local supply. It is also envisaged that this will provide protection for local electricity meter manufacturers and the opportunity to ramp local capacity in the production of meters.”