The tax on imported drugs is unhelpful

With a circular titled “Import Adjustment Tax”, the Federal Ministry of Finance recently directed the introduction of 20 per cent tax on imported medicament in the pharmaceutical sector. This means that for every imported drugs and allied products, a minimum duty of 20 per cent would be made payable to the treasury through the Nigeria Customs Service. Unfortunately, this development has not only led to an astronomical rise in the prices of essential drugs, it has also led to a deluge of fake drugs across the country. This is a worrisome development that should task the Federal Ministry of Health and other critical stakeholders.

It is noteworthy that the Pharmaceutical Society of Nigeria (PSN) and the Association of Pharmaceutical Importers of Nigeria (APIN) have called on the federal government to rescind the decision. The argument of these stakeholders is that in 2013, Nigeria had agreed to abide by the recommendation of an ECOWAS committee that drug importation within the African sub-region should attract a zero per cent duty. Against the background that neighbouring African countries are operating this zero tax regime plus lower port charges on drug importation, we support the position of PSN and APIN.

The main challenge of our country over the years has been the inability to ensure that our citizens, especially the rural dwellers, have access to basic primary health care. And with the high cost of essential drugs in the market owing to the rise on duty of imported drugs, it is obvious that the lives of many poor Nigerians are greatly endangered. We therefore urge President Muhammadu Buhari to direct the relevant authorities to halt this counter-productive policy so that enough drugs and medicament could be made available for citizens who need them at affordable prices.

Going by provisions of section 17 of our Constitution, the government is obliged to improve the welfare of Nigerian citizens by ensuring that they have access to adequate medical and health facilities. For a government that has consistently promised Nigerians access to primary health care services, this cannot be the right way to go. Making drugs which are not manufactured in Nigeria more expensive than they already are as a result of the high exchange rate will amount to a death sentence for majority of our people.

As things stand, the most effective way of ensuring that quality health care services are effectively delivered to majority of Nigerians is by allowing the public to have access to essential drugs at minimum cost. Without that, preventable diseases will continue to kill in Nigeria. By allowing the public unfettered access to essential drugs at affordable prices, some of the billions of naira squandered in medical tourism every year will be saved.

To the extent that health is wealth, most countries have built their economies around healthcare delivery systems. Unfortunately, while members of the Nigeria ruling elite are ever quick to travel abroad for the best medical treatment even for common ailments that can be treated at home, there is little or no consideration for the greater majority who depend on the neglected healthcare delivery system at home. That is the only way to explain the “import adjustment tax” on essential drugs.

While we are not opposed to the revenue generation drive of the current administration, this policy is unhelpful because of its implications to the health of our people. Besides, the policy directive runs contrary to the World Trade Organisation (WTO) recommendation of not more than five per cent duty on medicament as a way of fast-tracking the achievement of global vision of affordable universal healthcare and eliminating diseases. We hope that the authorities will look into the issue and redress the situation.