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CUSTOMS INFORMATION
TRADE POLICIES
NIGERIAN TRADE POLICIES ON IMPORTS AND EXPORTS
IMPORTS
The Federal Government intends to replace the current preshipment
inspection scheme with a destination scheme, and move from the Brussels
definition of value to a system based on WTO Agreement. A value added
tax of 5% applies to both domestically produced and imported goods;
and excise duties, ranging from 20% to 40%, are applied on certain
imports. Additional layers of duty are payable for purposes such as
port development and import supervision. Government has also increased
the number of goods on the import prohibition list. Nigeria has not
imposed any trade defense measure; however, the authorities have indicated
the need to protect local industries from dumping and unfair competition
within the WTO framework.
MEASURES DIRECTLY AFFECTING IMPORTS
(i) CUSTOMS PROCEDURES AND VALUATION
The importation of goods to Nigeria is governed by the Customs and
Excise Management Act; Customs and Excise Notices; and guide lines
set out by the Federal Ministry of Finance. Under these provisions,
importers do not need to be registered, since registration with the
Corporate Affairs Commission under the Companies and Allied Decree
of 1999 is sufficient to import all but a few regulated goods.
Importers must complete an import declaration form: Form M, other
required documents include: an attested invoice, bill of entry, copy
of bill of lading/airway bill, a packing list, certificate of insurance,
a bank receipt for import duties, a clean report of inspection issued
by the preshipment inspection agent. The Government has stepped up
efforts to bring efficiency to the customs administration. Reforms
to customs services are one of the core components of the Government’s
current reform programme. The objective of the programme is to modernize
and speed up customs clearance; simplify and rationalize tariffs,
duties, and waiver; improve revenue collection by customs; and strengthen
and professionalized customs services. The measures taken (or planned)
include: a downward shift in port taxes and levies, and elimination
of some redundant port security agencies; the establishment of a unit
to fight corruption in the provision of customs services; and administrative
changes to the management and operation of NCS. It is reported that
the efforts to modernize and professionalize the Nigerian Customs
Service and the Nigerian Port Authority have helped to reduced port
congestion and clearance rates, particularly at Lagos Apapa port,
which handles over 40% of Nigeria’s trade.
(ii) RULES OF ORIGIN
Nigeria’s non-preferential rules of origin are contained in
Customs Duties Art. Nigeria also applies the ECOWAS rules of origin
under which a finished product has community origin.
(iii) CUSTOM TARIFFS
Within the context of accelerated integration amongst ECOWAS member
states, Nigeria is committed to adjusting its tariffs to the ECOWAS
common external tariff, ranging from zero to 20% with a four band
tariff structure, by 2007. In general, Nigeria has lagged behind in
trade reforms and hence has higher average and dispersed tariffs.
Alignment with the ECOWAS CET should bring about liberalization and
rationalization of Nigeria’s current tariff regime and help
simplify customs administration.
(iv) DUTY EXEMPTIONS AND CONCESSIONS
The general import guidelines provide for exemptions from duties on
a number of goods, including: aircraft, their part and ancillary equipment;
life saving appliances; all goods imported for the official use of
a Consular Officer, where the Government of the country represented
grants similar privileges; furniture and personal effect of diplomats;
goods obtained free as technical assistance materials form donor international
organizations or countries; personal and household effects in passengers’
baggage; and military hardware and uniforms.
Various tariff concessions are also in place to attract investment.
Duty concessions are granted on certain raw materials used by manufacturers
in the communications, telecommunications, glass, baby napkin, motor
cycle and bicycle industries, by virtue of their status as “Bonafide”
manufacturers. Various special duty concessions have also been granted
to the British America Tobacco Company to enable it set up a tobacco
plant in Nigeria. Tariff concessions also apply on fertilizers, in
support of the agricultural sector.
(v) PREFERENTIAL TARIFFS
As a member of ECOWAS, Nigeria provides tariff preferences to other
ECOWAS member states
(vi) OTHER DUTIES AND TAXES
Nigeria bound other duties and charges on all imports at 80%. Additional
duties applying only to imports include: a port development levy of
7% of the duties payable; an ECOWAS community levy of 0.5%; a Comprehensive
Import Supervision Scheme charge of 1% on the f.o.b. value of imports,
a national automotive council levy of 2% on vehicles and parts; and
a levy of 10% on the importation of both sugar and rice.
(vii) EXCISE DUTY
Excise duties, which had been abolished at the time of the last TPR
of Nigeria, were reintroduced in 1999 on, inter alia, spirits, cigarettes,
alcoholic beverages, and cosmetics, at rates ranging from 20% to 40%.
Excise duties apply to the duty-inclusive price of imports, and to
the sales price of locally produced goods.
(viii)ANTI-DUMPING AND COUNTERVAILING MEASURES
The Customs Duties (Dumped and Subsidies Goods) Act 1958 provides
for the imposition of a special duty on any goods deemed to be dumped
by companies or subsidized by any Government or authority outside
Nigeria. Under the Act, goods are regarded as having been dumped if
the export price is lower than the “fair market price”.
(ix) IMPORT PROHIBITIONS, QUANTITATIVE RESTRICTIONS, AND
LICENSING
Under Nigeria’s Customs Legislation, import prohibition can
be applied to protect domestic industries; to reduce balance –
of – payments deficits; as anti- dumping measures; and for moral,
safety and other processes. The Government modifies the import prohibition
list, adding or subtracting items, through notices and decrees. (For
a comprehensive list of items on the prohibition list, please click
here
EXPORTS
(i) REGISTRATION AND DOCUMENTATION
Exporters are required to be registered with the Nigerian Export Promotion
Council (NEPC). The y must submit a completed application form along
with copies of a certificate of incorporation, tax clearance certificate
form C.O.7 and the memorandum of articles of association. Exporters
must renew their registration every two years, submitting evidence
of export performance and a current company tax clearance.
All exporters must complete and register an export proceeds (NXP
form with an authorized dealer) of their choice. Other export documents
include a proforma invoice, a sales contract, if applicable, NEPC
registration certificate, relevant sanitary and phytosanitary certificates,
shipping documents and other forms required by the importing country.
(ii) EXPORT TAXES, CHARGES AND LEVIES
The export amendment decree of 1992 prescribes that all new material
or unprocessed commodities, whether mineral or agriculture, may be
subjected to the payment of an export level as may be prescribed from
time to time, by order of the NEPC.
(iii) EXPORT PROHIBITION AND CONTROLS
Under Nigeria’s Export Prohibition Act, certain exports are
prohibited for purposes of domestic food security, value-added considerations,
and preservation of cultural heritage. Currently, the ban covers raw
hides and skins, timber (rough or sawn), scrap metals, unprocessed
rubber latex and rubber lumps, rice, yams, maize, beans and artifacts
and antiquities.
(iv) EXPORT INCENTIVES
The various incentive schemes available to exporters may somewhat
reduce the anti-export bias resulting from the protection of domestic
markets by high tariff and import prohibitions
(a) EXPORT SUBSIDIES AND FINANCE
The Export Expansion Grant Fund scheme (EEGF) provides cash inducement
to exporters who have exported a minimum of N500,000 of processed
products. The objective of the scheme is to stimulate exporters to
expand the volume of exports, diversify their product and market coverage.
Exporters of processed products are entitled to a 4% grant on their
total annual export turnover, subject to receipt of confirmation of
repatriation of export proceeds from the CBN and presentation of a
performance bond from any of the recognized financial institutions.
(b) DUTY DRAWBACK, AND MANUFACTURE-IN-BOUND SCHEMES
A drawback scheme allows for duties (including other levies) charged
on raw materials used in the manufacture of products to be refunded
upon the export of the final products. The purpose of this scheme
is to encourage manufacturing for exports. The scheme is to provide
automatic refunds of up to 60% upon initial screening by the Duty
Drawback Committee; the balance of the funds is granted upon final
processing of the application. To be eligible, applicants must be
companies incorporated in Nigeria. Under the manufacture-in-bond scheme,
raw materials may be imported duty-free for the production of export
goods, on the basis of a bond issued by a recognized financial institution.
The bond is discharged upon production of proof of export and repatriation
of foreign exchange.
(c) EXPORT PROMOTION AND ASSISTANCE
The Export Development Fund (EDF) was set up by the Government to
help finance certain activities of private exporting companies. These
include: participation in training courses, symposia, seminars, and
workshops; advertising and publicity campaign in foreign markets;
product design and consultancy; participation in trade mission, buyer-oriented
activities, overseas trade fairs, exhibitions, and sales promotion;
collection of trade information; organization of export groups; and
studies in respect of setting up export-oriented industries. The maximum
grant per company for each activity is 50% of the total direct cost
approved, up to maximum of N200,000.
(For more information Please visit www.shipperscouncil.com)
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