President Muhmmadu Buhari has approved a one-year deferment of the 35 percent import adjustment tax imposed on fully built unit (FBU) electricity meters as part of ratification for Nigerian Electricity Regulatory Commission (NERC), Meter Asset Provider scheme implementation.
Buhari said that the approval was to further implement 2019 fiscal policy measures for the implementation of Economic Community of West African States (ECOWAS) common external tariff (CET) 2017 – 2022.
The approval for adjustment followed a request by Minister of Finance, Budget And National Planning, Zainab Ahmed, to support the Nigerian Electricity Regulatory Commission (NERC) roll out 3million electricity meters under the Meter Asset Provider (MAP) framework.
Ahmed’s request had made reference to a 35 percent import adjustment tax (levy) which was approved in 2015 on the importation of FBU electricity meters which attracted 10 percent import duty rate in the ECOWAS CET.
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.
According to the regulation, MAPs shall 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 shall be as specified in the NERC local content regulations.
But in efforts to remove some of the impediments that have scuttled the effective implementation of the MAP programme, Ahmed had argued that the application of the 35 percent levy on electricity meters – HS Code 9028.30.00.00 has created a significant challenge to the smooth implementation of MAP scheme of NERC.
Even though the 35 percent was in existence since 2015, the MAP regulations by NERC in 2018 to bridge current electricity metering gap, did not factor the 35 percent levy in arriving at the regulated cost of electricity meters to end-users.
Consequently, 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.