HOW MUCH WILL I PAY AS CUSTOMS DUTY IF I IMPORT THIS?

"How much will I pay as Customs duty?" is one of the most frequently asked questions asked by potential importers and already importing clients. The amount to be paid as customs duty helps investors in short term and long term planning of business ventures.

Here, we are going to show you how to calculate or at least know the estimate of your customs duty.

Calcultating customs duty

1)      First, you have to know the cost of the goods [freight on board (FOB)] you want to import into the country. For example US$40,000.   

2)      You have to know the cost of shipment (freight) from the country of supply into our own country. Say US$2,000.

3)      Add the cost of the goods and the cost of shipment (freight) to get the total cost and freight (TOTAL C & F). So we have US$40,000 + US$2,000 = US$42,000

4)      Multiply the TOTAL C & F by the current interbank exchange rate (NGN305) to get the TOTAL C & F in naira. Total C & F is equivalent to CIF (US$42,000 X 305 = 12,810,000). So we have a CIF value of NGN12,810,000

Note: Nigeria customs service (NCS) has placed customs duty percentages most importable items. These customs duty percentages can be 5%, 10%, 20% etc. Also some of the importable items are VATable (i.e. they pay Value Added Tax). 

Scenario

Mr Obinna Adekoye Musa wants to import a 40ft container filled with new automobile spare parts. The FOB (cost of the goods) is USD40,000 while the CIF value is NGN12,810,000. The said good pays a 10% customs duty and a VAT of 5%. Calculate the total Customs duty to be paid by Mr Obinna Adekoye Musa.

Answer

First, you list out the laid down formula for customs duty calculation on a 10% duty and 5% VAT item

Surface duty (10% of the CIF)                       10% X NGN12,810,000 =      NGN1,281,000

Surcharge (7% of surface duty)                      7% X NGN1,281,000 =          NGN89,670   

ETLS levy (0.5% of CIF)                               0.5% X NGN12,810,000=      NGN64,050

CISS fee (1% of FOB)                                   1% X 40,000 X305=               NGN122,000

VAT (5% on all above + CIF)                        5% X (addition of all above) + (5%of CIF)

                                                                        (5% X 1,556,720) + (5% X 12,810,000)

                                                                        77,836        +         640,500 =  NGN718,336

TOTAL DUTY PAYABLE = NGN1,281,000 + NGN89,670 + NGN64,050 + NGN122,000 + NGN718,336

    = NGN2,275,056

Therefore, Mr Obi Adekoye Musa will pay a total customs duty of NGN2,276,056 for such importation

(Nota bene: this is a straightforward calculation. The exact amount to be paid may differ with NGN5000 NGN10,000 based on Customs assessment)

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GOODS/ITEMS PROHIBITED BY NIGERIA CUSTOMS SERVICE

This is the list of items prohibited from importation into the country. Go through to find out what you can legally import into the country.
Live or Dead Birds including Frozen Poultry Pork, Beef Birds Eggs – excluding hatching eggs Refined Vegetable Oils and Fats –[but excluding refined Linseed, Castor and Olive oils. Crude vegetable oil are however NOT banned from importation]. Cane or beet sugar and chemically pure sucrose, in solid form containing added flavouring or colouring matter - in retail packs. Cocoa Butter, Powder and Cakes Spaghetti/Noodles Fruit Juice in Retail Packs Waters, including Mineral Waters and Aerated Waters containing added Sugar or Sweetening Matter or Flavoured, ice snow –  other non-alcoholic beverages [ but excluding energy or Health Drinks {Liquid Dietary Supplements} e.g. Power Horse, Red Ginseng etc] and Beer and Stout (Bottled, Canned or Otherwise packed) Bagged Cement  Medicaments indicated below: Paracetamol Tablets and Syrups Cotrimoxazole Tablets Syrups Metronidazole Tablets and Syrups Chloroquine Tablets and Syrups Haematinic Formulations; Ferrous Sulphate and Ferrous Gluconate Tablets, Folic Acid Tablets, Vitamine B Complex Tablet [except modified released formulations]. Multivitamin Tablets, capsules and Syrups [except special formulations]. Aspirin Tablets [except modified released formulation and soluble aspirin]. Magnesium trisilicate tablets and suspensions. Piperazine tablets and Syrups Levamisole Tablets and Syrups Clotrimazole Cream Ointments – Penecilin/Gentamycin Pyrantel Pamoate tablets and Syrups Intravenous Fluids [Dextrose, Normal Saline, etc.] Waste Pharmaceuticals - Soaps and Detergents –  (in retail packs only) Mosquito Repellant Coils – (Mosquito Coils). Sanitary Wares of Plastics – and Domestic Articles and Wares of Plastics  [but excluding Baby Feeding bottles ] and flushing ceinstern and waterless toos toilets. Rethreaded and used Pneumatic tyres but excluding used trucks tyres for rethreading of sized 11.00 x 20 and above . Corrugated Paper and Paper Boards, and cartons, boxes and cases made from corrugated paper and paper boards, Toilet paper, Cleaning or facial tissue -excluding baby diapers and incotinent pads for adult use and Exercise Books Telephone Re-charge Cards and Vouchers – Carpets and other Textile floor coverings All types of Foot Wears, Bags and Suitcases  [but excluding Safety Shoes used in oil industries, Sports Shoes, canvass shoes all Completely Knocked Down (CKD) blanks and parts] Hollow Glass Bottles of a capacity exceeding 150mls (0.15 litres) of all kinds used for packaging of beverages by breweries and other beverage and drink companies – Used Compressors – , Used Air Conditioners – and Used Fridges/Freezers – Used Motor Vehicles above fifteen (15) years from the year of manufacture  Furniture –  but excluding Baby walkers, laboratory cabinets such as microscope table, fume cupboards, laboratory benches, Stadium Chairs, height adjustments device, base sledge, seat frames and control mechanism, arm guide and headguides. Also excluded are; skeletal parts of furniture such as blanks, unholstered or unfinished part of metal, plastics, veneer, chair shell etc. Also excluded are Motor Vehicle seats  and Seats other than garden seats or camping equipment, convertible into beds Ball Point Pens and parts including refills (excluding tip).  SOURCE: NIGERIA CUSTOMS SERVICE