Nigeria Customs introduces new 4% import levy – What it means for importers and businesses odugwu meaning The Nigeria Customs Service (NCS)...

 Nigeria Customs introduces new 4% import levy – What it means for importers and businesses

odugwu meaning

The Nigeria Customs Service (NCS) is changing how it takes fees at the ports. These changes could affect people who bring goods into the country, shipping lines, goods forwarders, and a lot of other people who work with moving goods.

This is what you need to know about the new rule and how it will affect your purchases.

Say goodbye to old fees and enter 4% Charge instead.
Comptroller-General Adewale Adeniyi said at a town hall meeting in Lagos that Customs will get rid of two big fees: the 7% fee for taking money out of the Federation Account and the 1% fee for the Comprehensive Import Supervision Scheme (CISS), which is an inspection fee before shipping.

A new 4% Free On Board (FOB) fee will be put in place of them.

"Enhancing Trade Compliance and System Optimisation Through Stakeholder Engagement" was the theme of the event, which brought together importers, freight forwarders, shipping lines, terminal operators, banks and other financial institutions (OFI), and other important stakeholders to talk about changes that would make trade compliance, clearance efficiency, and technology more up-to-date.

The 4% FOB charge is a fee that is based on the value of the goods that are being imported. It includes the cost of transporting those goods up to the port of exit, but not the cost of insurance or unloading. When you figure out how much something costs to bring into Nigeria, this 4% fee will now be added instead of the old fees.

The NCS said in February that it was going to put a 4% charge on the FOB amount of imports.

Later, though, this plan was put on hold so that all stakeholders could be involved and have their say on the implementation framework.

In his speech to the group, Adeniyi, the head of customs, said that the 4 FOB charge had to be brought back in order to support the Service's growing digital infrastructure.

He said that the tax is supported by the Nigeria Customs Service Act 2023, which makes it legal for it to be used and applied.

Why is this happening?

Adeniyi, the head of Customs, says the change is needed for two main reasons:

1. Streamlining Fees: A lot of people were worried about how many charges were being applied at the same time. The FOB charge takes the place of the two previous ones, so there will be no extra payments on top of the new 4%.

2. Paying for technology and modernisation: The Customs Service is introducing B'Odogwu, a new digital system made in Ghana, which is also known as the Unified Customs Management System (UCMS). The goal of this tool is to make trade easier, cut down on delays, and make things more clear. But it costs a lot to build and keep up.


A deniyi said that Nigeria Customs can't just depend on budgetary funds or fees that are already in place to pay for this technological upgrade. "We have to pay the 4% FOB because it's the only way to pay for the huge technology and modernisation program," he said.

What is B’Odogwu?

The fully digital trade and customs tool B'Odogwu was made in Nigeria by experts in the field. It will take the place of the old NICIS II system and is meant to:

1. Move the goods faster
2. Make trade rules more strict

3. Get rid of speed bumps

4. Make Nigeria stronger in international trade

Adeniyi, who is now the head of the World Customs Organisation (WCO) Council, said that Nigeria has a chance to show the world that it can make and use its own high-tech customs system.

He said, "Now that we are in charge of the WCO Council, let's use this chance to sell B'Odogwu to the world."

What does it mean for Business and Economy?

1. It will be easier to do business. Since traders won't have to pay as much in port fees, more people will want to trade and buy goods.

The cost of goods could go down because traders will have to pay less for port fees.

3. Less Corruption: Since there will be fewer fees, there will be less chance for shady business.

4. The government can make more money because more people will pay according to the rules if they are clear.

When does it start?

As was already said, the NCS first announced the 4% tax in February but then put it on hold to hear what people thought. "We have no choice... technology doesn't come cheap," Adeniyi says, confirming that it will happen soon.

A lot of people are glad that the fees have been simplified, but some are worried that the new method could cause delays, especially with banking and paperwork. On the other hand, NCS says the change will eventually make customs processes run more smoothly and with more technology.