Fear grips shippers, freight forwarders over Customs duty at port

Importers and freight forwarders in the umbrellas of Shippers Association Lagos State (SALS) and the National Association of Government Approved Freight Forwarders (NAGAFF) are worried over the sudden increase in Customs duty at the ports and borders.

While the SALS expressed the fear that importers and exporters may abandon their goods at the ports as a result of the increase in Customs duty’s exchange rate, NAGAFF said that the  increase in import duties would increase the cost of doing business as well as prices of imported goods.

The President of the association, Mr. Jonathan Nicol, stated on Monday in Lagos.

He explained that the exchange rate was moved up from N197 to N282 to a dollar, adding that this new Customs duty exchange regime had become another plague 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 shippers. Goods caught in this regime will be grossly affected. Some (goods) will be abandoned in the ports for lack of funds.”

Nicol further explained that this would increase the cost of doing business in Nigeria. He stressed that the Nigeria Customs Service (NCS) was handicapped due to the envisaged revenue target they must generate for the government.

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

The National Association of Government Approved Freight Forwarders (NAGAFF) said that the recent 43 percent hike in import duty by the NCS was hasty.

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 Controllers on July 1, 2016 directed that all commands should be charging duties based on the new forex regime.