Stakeholders Slam Customs, CBN Over 48% Hike in Import Duty, Say It is Detrimental to the Masses
Stakeholders from both the maritime and organized private sectors have strongly criticized the Nigeria Customs Service (NCS) and the Central Bank of Nigeria (CBN) for significantly raising import duties, arguing that such a move is harmful to the general populace.
According to a report by SHIPS & PORTS published on Saturday, the NCS and CBN have covertly increased import duties on all goods by approximately 48.5% this year by adjusting the dollar assessment rate of imported items from N951.842 per dollar in December 2023 to N1,413.62.
This translates to higher costs for Nigerians clearing their goods at the port, as import duties are tied to the dollar exchange rate.
The recent surge means that customs duty on imported goods has effectively tripled within the seven months of the Bola Ahmed Tinubu administration.
The updated rates have already been implemented on the Customs trade portal, prompting strong opposition from members of the organized private sector, importers, customs brokers, and others.
Emenike Nwokoeji, the National President of the Association of Nigerian Licensed Customs Agents (ANLCA), expressed concerns about the increase, stating that it is exacerbating inflation.
“That means more economic challenges for the poor masses who have been contending with the ever-increasing cost of PMS, endure bad road infrastructure, rising cost of foodstuffs, insecurity, hopelessness amidst the so-called renewed hope, which has long gone awry.
“What they are doing now is a gamble. They do not know the solution. Let the government block all the loopholes through which free money get into people’s hand. Everyone in government has access to public fund and since it is mostly acquired illegally, they cannot deposit it in banks so, they convert it to foreign exchange. The solution is to stop corruption. If foreign currency is used basically for foreign trade, we won’t be where we are today,” he said.
In addition, Lucky Amiwero, the National President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), attributed the increase in customs duty to the Central Bank of Nigeria (CBN).
He asserted that the CBN’s failure to stabilize the decline of the naira forces the Nigeria Customs Service to incorporate the current exchange rate when calculating import duties.
“The CBN controls the exchange rate and once there is an increase in the exchange rate, the customs must reflect it in their server. When this government came in, they adopted a floating exchange rate, which is not beneficial to a country that has no backup, couple with the hike in prices of fuel and diesel, it has tripled the whole system.
“There is a gradual inflow of poverty into the economy. A lot of people are moving down the poverty line because every increase in exchange rate affects everything in the market. This is because most of the commodities in the market have foreign input. The foreign input triggers the exchange rate and this shows that there is a problem in the country.
“A trade transaction should be predictable, consistent, transparency and this policy lacks these three qualities. It is detrimental to the common man. People cannot access money anymore. The take home pay has been affected by the transport rate. We also do not have backups. The subsidy, which the common man relies on has also been removed. Nothing is moving according to plan,” he lamented.
Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), expressed concern about the substantial rise in the exchange rate used to calculate import duties.
He highlighted that this development poses a dual challenge for investors across various sectors, particularly in the real sector. Yusuf emphasized that such a hike would exacerbate inflationary pressures by driving up production and operational expenses.
“It is even more troubling that the rate increase takes immediate effect. This is a policy action that is difficult to justify, especially in the light of the multiple headwinds that businesses are grappling with,” he said.
He consequently urged the CBN to reconsider the rate increase for the sake of the already struggling segments of society and the numerous businesses teetering on the brink of collapse.
Additionally, he suggested that determining the exchange rate for import duty calculations should be regarded as a fiscal policy issue and should fall under the jurisdiction of the fiscal authorities.
“This is necessary for proper alignment with extant fiscal policies,” he added.
(Ships & Ports)
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