UNDERSTANDING CUSTOMS DUTY RATE ($1/#1,330)

• Julius Oyedokun.

Customs Duty in Nigeria are levies payable by Importers of any product into the country and it rages typically from 5 percent to 35 percent depending on the product, and these are assessed with reference to the prevailing harmonised commodity and coding system (HS code).

For automobile importation, the Nigerian customs authority has pegged import duty at 20%, accompanied by a 15% levy on new and old vehicles to make a total of 35%. However, calculations can vary based on the specific rules and regulations of the NCS per time. The NCS yardstick for calculating this percentage is – Dollar value of your car multiplied by Customs exchange rate, divided by 100 and that result will be multiplied by Duty percentage to get Import duty payable –
i.e,
Value of Car: $5000 x
Customs e-rate: #1330 ÷ 100 x 35 = #2,327,500.

That is, Import duty payable to government covers on a vehicle valued at $5000 (based on the current customs e-rate #1330/$1) will be #2,327,500.

However, note that this is not inclusive of the Shipping and Terminal Bills and Handling that your customs agent will also add.

Essentially, the exchange rate as adopted by the Nigerian customs, is what determines what naira value you pay as duty on your imported vehicles.

Sometime in February 2024, the House of Representatives reached a resolution that the Central Bank of Nigeria should maintain the system exchange rate for customs duty and excise duty purposes below N1,000/$1, preferably N951. 941/$1 but the Central Bank of Nigeria maintained that the prevailing market rate for the day an importer fills the e-Form “M” is what will be used.

This overview is to expose car shoppers to one of the reasons why foreign used vehicles are becoming more expensive and beyond the reach of the common man.

Thanks for your time!