President Muhammadu Buhari has deferred implementation of the 35 per cent import adjustment levy imposed on fully built unit (FBU) electricity meters HSCode 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 by one year.
It is part of efforts to support the Nigerian Electricity Regulatory Commission (NERC) in rolling three million electricity meters under the meter asset provider (MAP) framework.
The 35 per cent import adjustment tax (levy) 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 a statement from the Federal Ministry of Finance, Budget and National Planning on Tuesday, “the 35 per cent 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 upscaling 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.”
The statement explained that although the 35 per cent was in existence since 2015, the MAP regulations by NERC in 2018 to bridge current electricity metering gap, did not factor the 35 per cent levy in arriving at the regulated cost of electricity meters to end-users (consumers).
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.
It added that 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 rollout.
This is in line with the timelines issued by NERC and the service level agreement agreed with the Electricity Distribution Companies (DISCOs).
In view of the local content for the sourcing of electricity meters, “it is approved that 50 per cent of the current demand for electricity meters be considered for importation at the ECOWAS CET import duty rate of 10 per cent zero levies.
This is to immediately bridge the gap between the demand for electricity meters and local supply.
