Customs duty hike endangers revenue target

By Muyiwa Lucas

Stakeholders in the  maritime industry have warned that the hike in the exchange rate for imported goods at the ports from N326 per dollar to N361 by the Central Bank of Nigeria (CBN), leading an increase in duty paid on cargoes, portends danger for the revenue target of the government.

The National President, Association of Nigerian Licenced Customs Agents (ANLCA), Tony Nwabunike, told The Nation at the weekend, that although ANLCA was still studying the development,  the hike would have an adverse effect on turnaround on imported goods as well as the import duty expectations of the government, saying this would result in a shortfall in revenue targets of various government agencies.

Nwabunike said the new rate of exchange would, ultimately, discourage importation, considering that an earlier initiative of denying importers foreign exchange to bring in some goods and services still subsists.

Owing to this, the Nigeria Customs Service (NCS), which had an initial target of N1.5 trillion for the fiscal year, was reduced to N800 billion due to the outbreak of the ravaging Coronavirus pandemic.

He said NCS might find it  difficult to meet the target if something was not done about the new FOREX rate.

The ANLCA chief said too many people in the maritime services chain would be affected by the rate adjustment.

Added to this, he said, “is the drop in import volume that may likely arise, including the inability of many people to clear their consignment.”

He warned that the nation should expect “a very low turnaround of goods and services in the ports very soon.” He regretted that the “Ease of doing business” mantra of the Federal Government might be jeopardised.

According to him, there would be greater spike in the ratio of people suffering. The freight forwarder contended that businesses were yet to overcome the effect of last February’s Value Added Tax (VAT) increase from five to 7.5 percent and now faced with another level of inflation arising from the forex rate increase, which he noted will have triple effect of inflation on the final consumer whom clearing agents renders services to.