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Tuesday, April 16, 2024

Importers to pay higher import duty as CBN increases customs exchange rate

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From June 26, 2023, importers will face an increase in import duties at Nigerian seaports as the Central Bank of Nigeria (CBN) raises the official exchange rate used by the Nigeria Customs Service (NCS) for duty calculation. The new rate has been set at N589/$1, a significant increase from the previous rate of N422.30/$1. This adjustment is a result of the recent floating of the naira, allowing market forces to determine the currency’s exchange rate.

The revised customs exchange rate is expected to impact import duty payments by clearing agents, leading to higher costs for cargo clearance. Comrade Omome Monije, the public relations officer of the Association of Nigerian Licensed Customs Agents (ANLCA), expressed concern about the increment, stating that clearing agents would bear the brunt of the change starting from Monday. She advised clearing agents to engage with their clients proactively to avoid any disagreements.

The increase in the exchange rate affects various aspects of cargo clearance. If clearing agents have outstanding Debit Notes or Pre-Arrival Assessment Results (PAAR) with the old rate, they will have to pay the difference. However, if they have already captured their work or accessed their values, they will proceed with the new rate. This change particularly impacts Roll On Roll Off (RORO) operations and those involved in door-to-door PARR shipments.

Remilekun Sikiru, a Licensed Customs Agent, confirmed the implementation of the new rate on the Nigeria Customs Service portal. He highlighted a significant increase in the Customs duty payable on vehicles. For instance, the duty on a Toyota Camry rose from N901,000 to N1,270,000, while the duty on a Venza increased from N1.632 million to N2.278 million. Similarly, the duty on a Toyota Corolla surged from N786,000 to N1.097 million.

Barr Ovien Imonitie, the Secretary of the Association of Nigerian Licensed Customs Agents (ANLCA) at Tin Can Island Port, noted that the approved exchange rate for doing business, both import and export, had risen to $589. He advised all clearing agents to adjust their custom duty payments accordingly for all imported goods.

As importers grapple with the higher import duties resulting from the CBN’s increase in the customs exchange rate, it is crucial for stakeholders to adapt to the new pricing structure. The foreign exchange market’s stability remains a prerogative of the Federal Government, and stakeholders can only hope for intervention to mitigate the impact on the industry. Importers and clearing agents must stay informed and comply with the revised regulations to ensure smooth cargo clearance and avoid any disruptions in their operations.

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