BREAKING NEWS, Business
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The floating of the Naira by the Central Bank of Nigeria has increased import duties by 43 percent
| By Anayo Ezugwu | Jul 18, 2016 @ 01:00 GMT |
THE Nigeria Customs Service, NCS, has increased import duties by 43 percent as a result of the new foreign exchange policy, which saw the Naira exchange rate to dollar move from N197 to a minimum of N280. Prior to the adjustment of the exchange rate, the duties on imported items were calculated based on N197 to a dollar rate despite the high rate in the black market.
A circular that was issued to all zonal coordinators and Customs Area Controllers, directed that the relevant provisions in the Customs and Excise Management Act on the evaluation of duty for cargoes should be complied with. The circular, signed by A. Adewuyi, deputy comptroller-general, Tariff and Trade, Nigeria Customs Service, stated that: “In consonance with the provisions of CEMA on the evaluation and clearing of imported goods into the country, Mr. President has approved the use of the exchange rate at the time of making entry as provided in CEMA, Customs and Excise Notice No.13 on the value of imported goods. Where the value of an imported good is shown in foreign currency, such value is to be converted to the equivalent Nigerian currency as at the rate at the time of making entry. The current rates of exchange are published at the Customs House.”
It added that Hameed Ali, comptroller-general, NCS, had directed that all declarations in respect of imported goods whose values were shown in foreign currencies must comply with the provision. Chris Osunkwo, spokesperson for the Tin-Can Island Customs Command, who confirmed the development said, “We observed last Friday that the current exchange rate of the naira to the dollar had been adjusted on our system.
This development has nothing to do with the Customs because we are acting in accordance with our law. That import duties had for months been evaluated based on the N197 to a dollar rate doesn’t mean it is fixed. Since the value of the naira will now be determined by market forces, it means adjustments will be made regularly, depending on the current value of the naira.”
The new adjustment of customs duties did not come as a surprise to the operators at the ports. Olayiwola Shittu, national president, Association of Nigeria Licensed Customs Agents, said although the development was expected, he urged the NCS to be transparent with the process. He said, “It is expected that the exchange rate will affect duty payment. It will be floating because the calculation cannot be static.
“It is dependent on the benchmark of the Central Bank of Nigeria. So, if we have more exports, we will earn more foreign exchange, the naira will appreciate and the exchange rate will drop. We are appealing to the Customs to have a holistic approach to the evaluation of duty. If they are going to use a benchmark of exchange for a certain period, then they should say so. We don’t want to be taken advantage of or have a situation where after paying duty for your cargo, at the point of release, someone asks you to go back and make another payment because another rate has been released for the new week.”
Shittu also appealed to the Customs to ensure that such directives and regulations emanating from its headquarters to the field officers were shared with customs agents and importers. “We need openness and transparency in the evaluation of import duties, especially when it comes to the benchmark for vehicles. Often, new directives are not shared with agents and they become victims of ignorance.
“This eventually leads to bargaining and corruption within the port system. It is easier to comply when we know what the regulation is. If everyone knows what the regulation is and still tries to short-change the system, then the person should face the music.”
The new directive to the customs is a fall out of the decision of the Monetary Policy Committee of the Central Bank of Nigeria, CBN, in May to switch to a flexible exchange rate policy. Godwin Emefiele. CBN governor, said following the recent drop in the country’s foreign exchange, it was high time the bank introduced greater flexibility in the management of foreign exchange.
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