Shippers in the country have threatened to stop using Nigerian seaports to bring in their goods from overseas due to high duties payable on imported goods.Thank you for reading this post, don't forget to subscribe!
The import duties have risen by as much as 60 per cent in the last one month as the Nigeria Customs Service has adjusted the naira-dollar exchange rate to the current market value of the local currency.
The naira exchanged for 313 to the dollar at the official interbank market on Monday, though it appreciated to 310 on Tuesday. This makes it the second time in one month that the Customs will make the adjustment in the exchange rate.
The PUNCH had last month reported that the NCS had directed that the dollar rate used for calculating import duties be increased from N197 to N282. The latest adjustment came into effect on Monday, August 1, 2016.
The National President, Association of Nigeria Licensed Customs Agents, Olayiwola Shittu, accused the Customs of trying to extort money from importers and agents alike by taking advantage of the current situation.
He said the Customs was calculating import duties using the prevailing exchange rate instead of the rate as of the time the importer raised his Form M.
Shittu said, “We expect these adjustments and have sensitised our members to it. We even expect the naira to exchange for 500 to a dollar if there is no immediate improvement in fortunes. We are not ignorant.
“It is a criminal action for the Customs to expect an importer who opened Form M at N197 to pay import duties at N310 when his cargo arrives. That is what they are doing.
“This is bad. Already, the importer has borrowed money from the bank, has done his calculation, and knows his profit margin using the rate as of the time he opened his Form M.”
Shittu called on the NCS to conform to its 2011 circular on the calculation of import duties, which stated that the exchange rate as of the time of opening of the Form M would be used for duty payment.
He said customs agents were ready to withdraw their services from the nation’s seaports should the situation persist.
Shittu added, “It is better that an importer does not import any cargo or the Customs inform us that it is the prevailing exchange rate that will be used for duty payment.
“Let the exchange rate come to N1,000 to the dollar; we will all bear the consequences, but not when people are being driven to commit suicide because they owe banks so much. It is unfair.”
The President, Shippers Association of Lagos State, Jonthan Nicol, expressed scepticism as regards the financing of imports as a result of the high import duties.
He called on the Federal Government to instead peg the exchange rate of the naira as regards import duty payment.
Nicol added, “We are walking on a very tight rope, which shouldn’t be. In the interim, goods are being diverted to neighbouring economies like that of Cotonou, which are stable as regards imports for now.
“We are looking at how the forex guidelines will work but we are worried as to how to finance it, because the banks are not even giving out loans. If we work with the new exchange rate, that means we will close shop.”
However, the spokesperson for the Tincan Customs Command, Chris Osunkwo, had in the earlier report insisted that the amount payable as import duties had nothing to do with the NCS as the Service only acted in accordance with our law.
“That import duties had for months been evaluated based on the N197 to a dollar exchange 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,” he explained.