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The Federal Government is aiming to generate N1.6 trillion from Customs duty and Value Added Tax (IVAT) on consignments entering Nigerian ports between 2024 and 2025, despite public concerns about the high cost of consumer goods.
Liquefied Petroleum Gas (LPG) has been exempted from VAT and customs duty, but the government is projected to earn N818.7 billion from Customs duty under its revised 2024 – 2026 Medium-Term Fiscal Framework (MTFF).
The expected revenue from Customs duty is N372.14 billion in 2024 and N446.56 billion in 2025, with fluctuations due to the floating exchange rate. Additionally, VAT revenue is estimated at N445 billion during this period, with N202.29 billion expected in 2024 and N242.75 billion in 2025.
The Central Bank of Nigeria (CBN) has raised the exchange rate for calculating import duty multiple times between March and April, leading to increased costs for importers.
The exchange rate for calculating import duty at the seaport was raised to N1,457.014/$1 from N1,414.599/$1, representing a significant increase in the cost of clearing goods at the port. Furthermore, there have been fluctuations in the exchange rate for import duty, with reductions and adjustments made by the CBN in a short period of time.
For instance, on April 29, 2029, the Customs duty exchange rate was reduced to N1,164.84/$1 from N1,327.35/$1 charged in April 22, 2024. The exchange rate for import duty was adjusted multiple times in March and April, resulting in fluctuations in costs for importers.
