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New customs duty: Shippers threaten to abandon goods at ports

The Shippers Association Lagos State has said that importers and exporters may abandon goods at the ports as a result of increase in Customs duty exchange rate.
Nigerian Ports Authority

Nigerian Ports Authority

The Shippers Association Lagos State has said that importers and exporters may abandon goods at the ports as a result of increase in Customs duty exchange rate.

The President of the association, Mr Jonathan Nicol, stated this in an interview with the News Agency of Nigeria (NAN) on Monday in Lagos.

He said that the exchange rate was moved up from from N197 to N282 to a dollar, adding that this new Customs duty exchange regime had become another scourge’’ to shippers.

According to him, it is the exchange rate on the contract document “the Form M’’, that should be used in payment of Customs duties.

Any distortion of that figure, obviously, will add to the clearing costs and the market prices of goods.

Importers are then made to source for additional funds to meet the costs of clearance. When the costs of clearing goods go up, it will be passed to the final consumers.

This in itself is a big challenge to the shipper. Goods caught in this regime will be grossly affected.

Some (goods) will be abandoned in the ports for lack of funds,’’ Nicol told NAN.

The shipper further explained that this would increase the cost of doing business in Nigeria.

He said, “The Nigeria Customs Service (NCS) is handicapped due to the envisaged revenue target they must generate for government.’’

Nicol added that the situation could destroy import businesses expected in Nigeria.

When you add the new terminal charges just increased by the operators, they are killing the “hen that lays the Golden Egg’’.

The shipper also expressed the concern that inflation in the country would increase.

The shipper will add all his costs and roll out new tariffs on his goods to break even, ’’ Nicol said.

He suggested that such action (tariffs) should be done step by step, adding that the new duty exchange rate from N197 to N282 is astronomical.

We envisage that more goods would be sent to ports in neighbouring countries where they have almost stable cost regimes. Smuggling will also increase,’’the shipper said.

NAN reports that the National Association of Government Approved Freight Forwarders (NAGAFF) on Friday described as hasty the recent 43 per cent hike in import duty by the NCS.

Speaking through its Publicity Secretary, Mr Stanley Ezenga, NAGAFF said that the increase in import duties would increase the cost of doing business as well as prices of imported goods.

The NCS, had through a circular issued to all Zonal Coordinators and Area Controllerson July 1, directed that all commands should be charging duties based on the new forex regime.

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