Money Market
CBN to Customs: Use official FX rate for import duty
The Central Bank of Nigeria (CBN) has directed Nigeria
Customs Service (NCS) and other related parties to adopt the closing rate in
the official foreign exchange (FX) window for import duty.
The apex bank gave the directive in a statement signed by
Hassan Mahmud, its director, trade and exchange department, on Friday.
According to the CBN, the FX rate at the point of
importation should be used for import duty assessment until the termination
date and clearance are finalised.
“Following the liberalization of the FX market on the
Willing Buyer-Willing Seller trading principle, the Central Bank of Nigeria has
noted the concerns of Importers of goods and services in the irregular changes
in the Import Duty Assessment levies applied by the Nigeria Custom Service,”
CBN said.
“These developments have further built uncertainties around
the pricing structure of goods and services in the economy and created abnormal
increases in the final sale prices of items, which is largely driven by
uncertainties, rather than traditional market fundamentals, with implications
to near term inflation trends.
“To this effect, the Central Bank of Nigeria wishes to
advise that the Nigeria Custom Service and other related Parties adopt the
closing FX rate on the date of opening Form M for the importation of goods, as
the FX rate to be used for Import Duty Assessment.
“This rate remains valid until the date of termination of
the importation and clearance of goods by importers.
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“This would enable the Nigeria Custom Service and the
importers to effectively plan appropriately and reduce the uncertainties around
varying daily exchange rate in determining their revenue or cost structure,
respectively.”
The financial regulator said the directive is to take effect
from February 26 2024, and the closing rate on the date of opening of Form M
for the importation of goods and services would be the rates that would apply
for the import duty assessment.
The Form ‘M’ is a declaration of intention to import
physical goods into Nigeria.
CBN said the new directive supersedes the requirements of
“Memorandum 9, J (2) of the Central Bank of Nigeria Foreign Exchange Manual.
(Revised Edition), 2018”.
“While the CBN is
mindful of the initial volatility and price distortions in the aftermath of the
FX market liberalization, the bank is confident that these reforms would in the
medium term, it would ensure stability in the market and entrench market
confidence necessary to attract investment capital for the growth and
development of the Nigerian economy,” the apex bank said.
On February 16, 2024, the financial regulator announced the
reviewed allowable limit of price deviation for exports and imports.
CBN increased the allowable limit to 15 percent – up from
2.5 percent – citing global inflation and other related challenges.
