Hike in Customs duty will lead to higher inflation – Stakeholders

The hike in import duty by the Nigeria Customs Service (NCS) will lead to higher inflation and further weaken the purchasing powers of Nigeria’s impoverished masses, according to a cross section of stakeholders who spoke with SHIPS & PORTS DAILY yesterday.

SHIPS & PORTS DAILY reports that the Nigeria Customs Service reviewed the dollar rate it uses to calculate duties on cargoes from N199 to N286 on Friday, effectively increasing the tariffs payable on all imported items by 44%.

Managing Director of a leading licensed customs agency, Mickey Excellence Nigeria Limited, Alhaji Babatunde Mukhaila, while speaking exclusively with SHIPS & PORTS DAILY, said the recent move by NCS will mean more money for government but more difficulty for Nigerians.

He said, “In layman terms, it simply puts more money into the conffers of Customs and creates an increase in inflationary rate. It is another bad luck to the port and maritime business and the operators.

“As I speak with you, I have over five to six transactions that slept overnight, Thursday and woke up to this unpalatable Friday morning and up till now, have not being able to go through (clearing) because the duty payable just sky-rocketed suddenly. So, its going to be a big problem for practitioners and the importers.”

Mukhaila argued that the new Customs duty regime would further fuel smuggling and the diversion of cargoes meant for the Nigerian market to the ports of neighbouring countries.

“Some cargoes have been trapped at the port and I don’t see how they are going to break even. They can’t break even with this development,” he said.

Founder of the National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Boniface Aniebonam, blamed the floating of the exchange rate for the development.

He also faulted Customs officials for arbitrary allocation of values to imported items.

He said, “Nobody is in charge of the ports, nobody is listening to each other, everyone is on their own. If one has a problem with Customs, whom do you go to? The Comptroller-General of Customs is there but we have not seen him. We don’t have access to him. So whom do you complain to?”

Former National President of the Association of Nigerian Licensed Customs Agents (ANLCA), Chief Ernest Elochukwu said the import duty hike will not only fuel inflation but exercabate the smuggling of goods across Nigeria’s frontiers.

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