Exemption Of Animal Feeds From VAT Excites Farmers


LAGOS – Livestock farmers in the country have continued to show excitement on President Muhammadu Buhari’s request to the National Assembly to exempt animal feeds from the list of items that would attract payment of the Value Added Tax (VAT). 

The farmers said that it is a welcome development that they have been clamouring for, over time. 

They said if implemented, it will definitely have a positive effect on the farmers’ productivity, their cost of production and it will attract more people into the sector which will in turn contribute positively to the country’s Gross Domestic Products (GDP). 

Dr. Ayoola Oduntan, Group Managing Director of Amo Farms said that once again President Buhari has shown his interest in alleviating the suffering of the masses. 

He said that the price of poultry products is high compared to income in Nigeria and that measures like this will ensure the price of food remains within the reach of the masses and will increase potential for the sustenance of the growth in the poultry industry. 

“With this President Buhari has shown his interest in alleviating the suffering of the masses and measures as this will ensure the price of food remains within the reach of the masses and will increase potential for the sustenance of the growth in the poultry industry,” he said. 

Nurudeen Tiamiyu, National Vice President of Tilapia Aquaculture Developers Association of Nigeria (TADAN) in his own view said that it is a welcome development, that it is something farmers have been clamouring for even when VAT was 5 per cent. 

He said now that VAT is 7.5 per cent it would have been worse off for production. 

“Now removing 7.5 per cent from production cost is a lot for farmers to break even and to be more sustainable, so we really appreciate it, it is a welcome development for the industry,” he said. 

Speaking on the effect of this to prices of livestock products, Tiamiyu stated that there are other issues surrounding the cost of production, that prices are not expected to go up ones it is been implemented. 

Godwin Egbebe, Chairman, Poultry Association of Nigeria (PAN), Lagos State Chapter appreciated the President for the wise decision to remove animal feed from VAT, stating that he believes that it will be a relief for farmers and it will boost production. 

Nurat Atoba, President, Lagos State Catfish and Allied Farmers Association (LASCAFAN), said that farmers are very happy about the pronouncement, because that is what they have been calling for, for a very longtime. 

“Honestly we are happy about the pronouncement on the exemption of animal feed from VAT because this is what we have been calling for, for a long time now, especially the imported 72 per cent fish meal which is a major ingredient of our fish feed and the price is so high as a result of all the taxes imposed on the imported ones. 

“We are so happy that, that has been pronounced and we look forward to the positive impact on our production,” she said. 

Atoba stated that when implemented it will reduce the farmers’ cost of production and that they will make more profit and will also encourage more people to go into agriculture especially the youth. 

“This is a welcome development, I believe this will encourage more people to come into agriculture, especially our youths, because if we are making money they will be encouraged to go into agriculture,” she added. 

Similarly, Stephen Olufemi, General Secretary, Poultry Association of Nigeria, (PAN) Lagos state chapter said that the government is now dancing to the tune of the farmers, and that farmers will really enjoy the VAT exemption on animal feed. 

He said that it is a very good step that the government has taken and that it will surely reduce the cost of production and will also give room to produce more, stressing that if the cost of production is reduced the selling price will also reduce which will be to the benefit of the farmers and the consumers. 

He said that most of the benefits, farmers are receiving from the government goes down to the final consumers, because ones the production cost comes down, selling price will also come down. 

It would be recalled that, the Senate received an executive bill from President Muhammadu Buhari to amend the Finance Act 2019 recently passed by the National Assembly. 

The Act which was passed by the Senate on November 21, 2019, received presidential assent on January 13, 2020. 

President Buhari is seeking the exemption of Animal Feeds from taxable food items, so as to create incentives for small businesses involved in livestock, fishing and primary crop production in Nigeria. 

The executive bill, accompanied with a formal letter was read during plenary by the President of the Senate, Ahmad Lawan. 

The president in his letter, explained that the request for amendment is aimed at clarifying the administrative date for the increase in Value Added Tax from 5 percent to 7.5 percent, effective from February 1, 2020. 

The letter reads: “Pursuant to Sections 58 and 59 of the Constitution of the Federal Republic of Nigeria (as amended), I formally write to request that the Finance Act, 2019 (Amendment) bill, be considered by the Senate for passage into law. 

“This bill seeks to amend the Finance Act, 2019, as recently passed by the National Assembly, by clarifying: that the administrative effective date for the increase in Value Added Tax from 5 percent to 7.5 percent is the 1st of February, 2020. 

“That Animal Feeds are included in the list of basic food items that are exempt from Value Added Tax; and aspects of the tax holiday incentive for agriculture, by targeting this incentive to Small and Medium sized companies that invest in primary crop, livestock, forestry and fishing agricultural production. 

“This incentive is also to be administered by the Nigerian Investment Promotion Commission pursuant to the Industrial Development (Income Tax Relief) Act.”

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