How to Save Money on Nigeria Custom Tariff for Imported Vehicles
Nigeria custom tariff is the amount of tax that importers have to pay when they bring goods into the country. The tariff is based on the Harmonized System (HS) code of the product, which is an international classification system for trade. The tariff rate varies depending on the type, value, and origin of the product.
One of the most common products that Nigerians import is vehicles. According to the Nigeria Customs Service (NCS), Nigeria imported about 400,000 vehicles in 2021, worth over N1.28 trillion. However, importing vehicles can be very expensive due to the high tariff rate and other charges.
The NCS has recently reviewed the duty rate on imported used vehicles, also known as tokunbo, from 35% to 20%. This means that importers can save 15% on the tariff for used vehicles. However, this does not apply to new vehicles, which still have a 20% duty rate and a 20% National Automotive Council (NAC) levy.
How can you save money on Nigeria custom tariff for imported vehicles?
Here are some tips:
Choose a used vehicle over a new one. As mentioned above, used vehicles have a lower duty rate than new ones. You can also find good quality used vehicles at affordable prices from reputable dealers or online platforms.
Check the HS code of the vehicle before you buy it. The HS code determines the tariff rate and other charges that you have to pay. You can use the CET Tariff search engine on the NCS website to find out the HS code and the applicable tariff rate for any product.
Negotiate with the seller or agent for a lower invoice value. The invoice value is the price that you pay for the vehicle, which is also used to calculate the tariff. If you can get a lower invoice value, you can reduce the amount of tax that you have to pay.
Hire a licensed clearing agent to handle the customs clearance process. A clearing agent can help you with the documentation, payment, and inspection of your vehicle at the port of entry. They can also advise you on how to avoid delays, penalties, and frauds.
Pay your tariff and other charges promptly and accurately. You can pay your tariff and other charges online through the Nigeria Single Window Trade portal or at any designated bank. Make sure that you pay the correct amount and keep your receipts as proof of payment.
By following these tips, you can save money on Nigeria custom tariff for imported vehicles and enjoy your ride without breaking the bank.
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Nigeria Custom Tariff: Trends and Implications for the Global Market
Nigeria is one of the largest economies in Africa, with a population of over 200 million people and a gross domestic product (GDP) of about $448 billion in 2020. The country is also a major trading partner for many countries around the world, especially in Europe, Asia and America. However, Nigeria’s trade policy has been undergoing some changes in recent years, especially with regards to its custom tariff regime. In this blog post, we will examine some of the trends and implications of Nigeria’s custom tariff for the global market.
Custom Tariff: Definition and Types
Custom tariff is a tax imposed by a government on imported or exported goods. It is usually calculated as a percentage of the value of the goods or as a fixed amount per unit. Custom tariff serves various purposes, such as:
- Protecting domestic industries from foreign competition
- Raising revenue for the government
- Regulating the flow of goods across borders
- Promoting or discouraging certain types of goods or sectors
There are different types of custom tariff, depending on the criteria used to determine the rate. Some of the common types are:
- Ad valorem tariff: A tariff based on the value of the goods
- Specific tariff: A tariff based on the quantity or weight of the goods
- Compound tariff: A tariff that combines both ad valorem and specific elements
- Harmonized tariff: A tariff that follows a common classification system among different countries
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Nigeria’s Custom Tariff: History and Current Situation
- 1978: Nigeria adopted the Customs Cooperation Council Nomenclature (CCCN), a harmonized system of classifying goods for customs purposes
- 1995: Nigeria joined the World Trade Organization (WTO), committing to reduce its tariffs and abide by its rules
- 2005: Nigeria adopted the Economic Community of West African States (ECOWAS) Common External Tariff (CET), a regional tariff regime that aims to foster trade integration among ECOWAS member states
- 2015: Nigeria implemented a revised version of the CET, with some adjustments to suit its national interests
- 2020: Nigeria reduced its duty rate on imported used vehicles from 35% to 20%, following public outcry and pressure from car dealers
According to the International Trade Administration (ITA), Nigeria’s average duty rate in 2020 was 16.96%, with some products attracting higher rates of up to 50%. Some of the products that enjoy zero or low duty rates include books, agricultural machinery, pharmaceuticals, renewable energy equipment and raw materials. Some of the products that face high duty rates include alcohol, tobacco, vehicles, rice, sugar and textiles.
Nigeria’s Custom Tariff: Effects and Challenges for the Global Market
Nigeria’s custom tariff regime has significant effects and challenges for the global market, both positive and negative. Some of the effects and challenges are:
- Trade diversion: Nigeria’s custom tariff may divert trade away from countries that face higher tariffs to countries that enjoy lower tariffs or preferential treatment. For example, Nigeria has signed several bilateral and multilateral trade agreements with countries such as China, India, Turkey, Brazil and South Africa, which may give them an edge over other competitors in accessing Nigeria’s market.
- Trade creation: Nigeria’s custom tariff may also create trade opportunities for countries that can offer competitive prices and quality products to meet Nigeria’s demand. For example, Nigeria imports a large amount of machinery, electronics, chemicals, food and beverages from various countries around the world, creating a lucrative market for exporters.
- Revenue generation: Nigeria’s custom tariff is a major source of revenue for the government, accounting for about 20% of its total revenue in 2019. This revenue can be used to finance public services and infrastructure development in Nigeria.
- Protectionism: Nigeria’s custom tariff may also be seen as a form of protectionism, aimed at shielding its domestic industries from foreign competition. This may hamper innovation, efficiency and productivity in Nigeria’s economy, as well as increase the cost of living for consumers.
- Smuggling: Nigeria’s custom tariff may also encourage smuggling activities across its borders, especially with neighboring countries such as Benin, Niger and Cameroon. Smuggling undermines Nigeria’s revenue collection, security and health standards, as well as distorts its trade statistics.
Nigeria’s custom tariff is an important aspect of its trade policy that affects its economic performance and relations with other countries. It reflects Nigeria’s interests and priorities in balancing between revenue generation, protectionism, regional integration and global competitiveness. Nigeria’s custom tariff also poses various effects and challenges for the global market, requiring careful analysis and strategic response from both importers and exporters.
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