Nigeria Customs introduces new 4% import levy – What it means for importers and businesses The Nigeria Customs Service (NCS) is changing t...
Nigeria Customs introduces new 4% import levy – What it means for importers and businesses
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The Nigeria Customs Service (NCS) is changing the way it collects fees at the ports. This could have an effect on importers, shipping lines, freight forwarders, and almost anyone else that moves products into the country. odugwu meaning
This is everything you need to know about the new policy and how it will influence your imports.
Say goodbye to old taxes and hello to the 4% Charge.
Comptroller-General Adewale Adeniyi said during a town hall gathering in Lagos that Customs will get rid of two big fees: the 1% Comprehensive Import Supervision Scheme (CISS) charge, which is a pre-shipment inspection cost, and the 7% collection fee from the Federation Account.
A new 4% Free On Board (FOB) tax will take their place.
The event, which had the theme "Enhancing Trade Compliance and System Optimisation Through Stakeholder Engagement," brought together importers, freight forwarders, shipping lines, terminal operators, banks and other financial institutions (OFI), and other important stakeholders to talk about changes that would make trade compliance better, clearance faster, and technology more up-to-date.
The 4% FOB fee is based on the value of the goods being imported and includes the cost of getting them to the port of departure (but not insurance or unloading). This means that if you are bringing items into Nigeria, your cost calculation will now include this 4% levy instead of the old fees.
In February, the NCS said it will start charging four percent on the FOB value of imports.
But this plan was put on hold so that all stakeholders may be fully involved and consulted about the implementation structure.
Adeniyi, the head of customs, told the participants that the 4 FOB levy had to be reintroduced to help the Service's growing digital infrastructure.
He said that the Nigeria Customs Service Act 2023 supports the levy by giving it a legislative framework for how it can be used and applied.
1. Simplifying Fees: A lot of people had problems with having to pay more than one fee. There will be no further payments above the new 4% because the FOB fee replaces the two that are already there.
2. Paying for technology and modernisation: The Customs Service is putting in place a new indigenous digital system called B'Odogwu, which is also known as the Unified Customs Management System (UCMS). This platform is supposed to make trade easier, speed things up, and make things clearer. But it's not cheap to develop and keep up.
A deniyi said that Nigeria Customs can't only use budget allocations or current levies to pay for this technology update. He said, "We have to pay the 4% FOB because it is needed to pay for the big modernisation and technology program."
1. Speed up the process of clearing goods
2. Make sure that trade rules are followed better
3. Get rid of bottlenecks
4. Help Nigeria compete better in world trade
Adeniyi, who is also the Chairman of the World Customs Organisation (WCO) Council, said that Nigeria has a chance to show the world that it can construct and administer its own advanced customs technology.
He said, "Now that we have the WCO Council Chairmanship, let's use the chance to sell B'Odogwu to the world."
What does it mean for the economy and business?
1. It will be easier to do business. More people will want to import and trade because traders won't have to pay too much in port fees.
2. Prices might go down. Goods could be cheaper since traders will have to pay less in port fees.
3. Less Corruption: There will be less opportunity for shady deals if there are fewer costs.
4. The government can make more money—more people will pay the appropriate way if the system is clearer.
Some people are delighted that the charges are now easier to understand, but others are apprehensive about probable delays, especially when it comes to banking and paperwork as the new system is put into place. NCS, on the other hand, says that the shift will eventually make customs operations run more smoothly and be more tech-driven.
This is everything you need to know about the new policy and how it will influence your imports.
Say goodbye to old taxes and hello to the 4% Charge.
Comptroller-General Adewale Adeniyi said during a town hall gathering in Lagos that Customs will get rid of two big fees: the 1% Comprehensive Import Supervision Scheme (CISS) charge, which is a pre-shipment inspection cost, and the 7% collection fee from the Federation Account.
A new 4% Free On Board (FOB) tax will take their place.
The event, which had the theme "Enhancing Trade Compliance and System Optimisation Through Stakeholder Engagement," brought together importers, freight forwarders, shipping lines, terminal operators, banks and other financial institutions (OFI), and other important stakeholders to talk about changes that would make trade compliance better, clearance faster, and technology more up-to-date.
The 4% FOB fee is based on the value of the goods being imported and includes the cost of getting them to the port of departure (but not insurance or unloading). This means that if you are bringing items into Nigeria, your cost calculation will now include this 4% levy instead of the old fees.
In February, the NCS said it will start charging four percent on the FOB value of imports.
But this plan was put on hold so that all stakeholders may be fully involved and consulted about the implementation structure.
Adeniyi, the head of customs, told the participants that the 4 FOB levy had to be reintroduced to help the Service's growing digital infrastructure.
He said that the Nigeria Customs Service Act 2023 supports the levy by giving it a legislative framework for how it can be used and applied.
Why is this happening?
Customs chief Adeniyi says the adjustment is needed for two key reasons:1. Simplifying Fees: A lot of people had problems with having to pay more than one fee. There will be no further payments above the new 4% because the FOB fee replaces the two that are already there.
2. Paying for technology and modernisation: The Customs Service is putting in place a new indigenous digital system called B'Odogwu, which is also known as the Unified Customs Management System (UCMS). This platform is supposed to make trade easier, speed things up, and make things clearer. But it's not cheap to develop and keep up.
A deniyi said that Nigeria Customs can't only use budget allocations or current levies to pay for this technology update. He said, "We have to pay the 4% FOB because it is needed to pay for the big modernisation and technology program."
What is B’Odogwu?
Nigerian experts built B'Odogwu, a fully digital trade and customs platform. It will take the place of the earlier NICIS II system and is projected to1. Speed up the process of clearing goods
2. Make sure that trade rules are followed better
3. Get rid of bottlenecks
4. Help Nigeria compete better in world trade
Adeniyi, who is also the Chairman of the World Customs Organisation (WCO) Council, said that Nigeria has a chance to show the world that it can construct and administer its own advanced customs technology.
He said, "Now that we have the WCO Council Chairmanship, let's use the chance to sell B'Odogwu to the world."
What does it mean for the economy and business?
1. It will be easier to do business. More people will want to import and trade because traders won't have to pay too much in port fees.
2. Prices might go down. Goods could be cheaper since traders will have to pay less in port fees.
3. Less Corruption: There will be less opportunity for shady deals if there are fewer costs.
4. The government can make more money—more people will pay the appropriate way if the system is clearer.
When does it start?
Earlier, it was said that the NCS first announced the 4% tax in February but put it on hold for talks. Now Adeniyi says it's going to happen soon: "We have no choice... technology doesn't come cheap."Some people are delighted that the charges are now easier to understand, but others are apprehensive about probable delays, especially when it comes to banking and paperwork as the new system is put into place. NCS, on the other hand, says that the shift will eventually make customs operations run more smoothly and be more tech-driven.
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