CBN’s Naira Devaluation Drives Up Cost of Vehicle Duties as Customs Fix Own Exchange Rates
- Importers of goods, products, and vehicles in Nigeria will have to pay more on import duty
- The development is due to a 40% increase in import duty by the Nigeria Customs Service
- The increase is caused by the naira devaluation, leading to Customs fixing the exchange rate for import duty N589 to a dollar from N422.30
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The ongoing foreign exchange rate reforms by the Central Bank of Nigeria have hit the maritime sector with a 40% increase in the exchange rate used in calculating import duty.
The Nigeria Customs on Saturday, June 24, 2023, increased the exchange rate used for import duty from N422.30 to a dollar to N589 to a dollar.
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Naira devaluation raises import duty
The development led to a 40% increase in import duty on imported cargo, including vehicles, Punch report said.
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According to information published on the Customs website, manufacturers bringing goods into the country’s seaport will pay more as an import duty tariff following the addition of N167.15 to any one dollar of the amount used to calculate duty.
For example, an importer of a vehicle will pay a 20% import duty and 20% levy, amounting to 40% of the vehicle's total value.
BusinessDay reports that to determine the car's value, Customs will generate the value on the Vehicle Identification Number (VIN) Valuation system using the chassis number of the vehicle in question.
Imported vehicles to pay more duties
If the VIN-Valuation system gives a $10,000 value to the car in question, the importer must pay 40% of that $10,000 as import duty and levy.
To get the estimated duty to pay Customs, which is referred to as the surface value, the dollar value of that $10,000 would be converted to naira using the Customs exchange rate of N589.45 per dollar, after which the 40% would be paid as duty and levy.
Additionally, the importer will pay for VAT, surcharge, ECOWAS Tax Liberalization Scheme (ETL), terminal charges, shipping charges, and clearing charges to Customs Licensed Agents.
FG Releases new details as value of Tokunbo cars in Nigeria falls by 47% in 2022
Legit.ng reported that according to the National Bureau of Statistics (NBS), the value of used vehicles dropped by 47% in 2022, to N335.05 billion from N617.48 billion in 2021.
The NBS data says that used cars with diesel or semi-diesel engines cost around N72.32 billion to import in Q1 of 2022, N96.76 billion in Q2, about N90.77 billion in Q3 and N65.19 billion in Q4 of 2022, computing about N325.05 billion.
Source: Legit.ng
