Import duty on rice will be reviewed from the current 110 per cent.
The Minister of Finance, Ngozi Okonjo-Iweala, on Wednesday said the Federal Government has decided on a downward review of tariff on importation of rice.
Mrs. Okonjo-Iweala, who disclosed this while answering questions at the ‘Budget 2014 Jam’, in Abuja said that the drop in the tariff would reduce smuggling of the commodity into the country.
Budget 2014 Jam is a youth online programme where the minister answers questions on the Federal Government’s 2014 budget from youths across the nation.
The three-day programme, which began on Tuesday, is organised by the Ministry of Finance in Collaboration with IBM Technology, a telecommunication firm.
The minister said that the existing 110 per cent duty on the importation of rice was encouraging smuggling of the commodity into the country.
“We increased the tariff to110 per cent, and it encouraged some people to go and grow rice and we grew 1.1 million metric tonnes of the product.
“But it also encouraged smuggling by neighboring countries because they immediately dropped their own tariffs to 10 per cent,” she said.
She added that the rice issue was similar to tariff on importation of used vehicles, saying “we are watching it now to see what the appropriate tariff to be paid on it will be.’’
“For rice, we decided to bring it down because we see that it is not working,” she said.
Mrs. Okonjo-Iweala explained that the government had decided to encourage the automobile industry to ensure that vehicles were manufactured in the country.
She said that the government spent a lot of money on importation of cars, adding that such expenditure had to be halted to encourage indigenous production of vehicles.
“We have our own indigenous Innoson, who has been manufacturing cars. First, it started with assembling of the cars but now 50 per cent of his car parts are manufactured from scratch here in this country.
“And, we said that if we can do this, why can’t we invite other people to manufacture cars here and sell. For that, we are giving them some incentives to bring in some parts that they will need, free of duty.
“We are also increasing the tariff but that’s a very tricky area. We are watching it to see what the appropriate tariff should be,’’ she said.
Mrs. Okonjo-Iweala called on Nigerians to be patient with government as it was being cautious with the vehicle importation tariff, saying that the government would not want to record smuggling of vehicles as being done for rice.