PRESIDENT Muhammadu Buhari has given approval for a one-year extension of the 35 per cent import adjustment tax imposed on fully built unit electricity meters, HS Code 9028.30.00.00.
The tax deferment is given under the 2019 fiscal policy measures for the implementation of the Economic Community of West African States’ common external tariff 2017–2022.
The development was confirmed by the Special Adviser, Media, and Communications to the Minister of Finance, Budget and National Planning, Yunusa Tanko Abdullahi.
In line with the Government’s commitment to tackling 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, Zainab Ahmed.
The approval, the statement said, was given to support the Nigerian Electricity Regulatory Commission in rolling three million electricity meters, which is under the Meter Asset Provider framework.
The request had made reference to a 35 per cent import adjustment tax, which was approved in 2015 on the importation of FBU electricity meters which attracted a 10 percent import duty rate in the ECOWAS CET.
Ahmed said, “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.
“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.”
Based on Section 9 of the MAP regulations, MAPs must 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 would be as specified in the NERC local content regulations.
Though the 35 percent was in existence since 2015, the MAP regulations by NERC in 2018 to bridge the current electricity metering gap, did not factor the 35 percent levy in arriving at the regulated cost of electricity meters to consumers.
The statement revealed that electricity consumers had 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 in 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 Distribution Companies.
