CBN slashes FX duty rates by 5.3%.

CBN slashes FX duty rates by 5.3%.

The Central Bank of Nigeria (CBN) has announced a further decrease in the exchange rate used to calculate import duties.

Information about the decrease was posted on the official trade portal of the Nigeria Customs Service. 

The reduction comes after a period of relative stability in the exchange rate between the Naira and the United States dollar.

As of yesterday, the rate for calculating customs duties was N1,544.081 per dollar. This represents a 5.3 percent decrease compared to the previous rate of N1,630.159 to a dollar used on Friday.

In simpler terms, importers will now pay N86.08 less per dollar when clearing their goods through the ports.

This change reflects the CBN’s ongoing efforts to ensure that import duties accurately reflect the prevailing exchange rate.

By adjusting the rate downward, the CBN aims to ease the pressure on companies importing goods. The expectation is that this will lead to a more predictable and stable environment for international trade.

On February 23, 2024, the CBN issued a circular in response to concerns from importers regarding fluctuating import duty.

Key points of the CBN circular include acknowledging market volatility and price distortions due to the liberalisation of the foreign exchange market, addressing importers’ concerns about uncertainties caused by fluctuating exchange rates affecting duty calculations, and advising the NCS to use the closing FX rate on the date of opening Form M for imports as the fixed rate for duty assessment.

This fixed rate will remain valid until the completion of import and clearance of goods.

The measures, along with the reduced customs duty rate and clarified import duty assessment process, aim to bring stability and transparency to the import environment.

This is expected to benefit businesses, consumers, and the overall Nigerian economy.

Importers and businesses involved in international trade were advised to keep themselves updated with the latest information from the apex bank to accurately calculate duties and avoid delays or issues when clearing their goods.