Every person who brings goods into Nigeria wants to know how long the whole process will take, from exporting the goods to bringing them in. They always ask how much it would cost to clear the goods so they can figure out how much profit they would make on the shipments. This article will look at how to calculate Customs Duty Charge in Nigeria in response to these questions.
Nigeria imposes customs taxes solely on imports. The prevalent Harmonized Commodity and Coding System is used to determine rates, which normally range from 5% to 35% according on the kind of item (HS code).
Shipping lines and airlines are required by law to always include the Form M and BA numbers for every shipment. This is for all import shipments to Nigeria prior to submitting manifests to the Nigerian Customs Service Department for effective tracking of import duties.
Below is a simplified way to calculate Nigeria Custom Duty Charges for imported good .You can download the calculator below . Take for example
Osagie Irabor an online shopping entrepreneur who imports and sells compuer hardware in Nigeria.
Osagie purchased $5,000 worth of hardware from China. $500 was paid for additional incidental expenses. Therefore, total FOB = $5,500.
The first step in establishing Customs Duty Charges is to get the HS Code. This can assist you determine the tax due to customs for importing the items, also known as Surface Duty, i.e. ID (Import Duty).
Assuming the HS Code is 5407, hence its Import Duty is determined at 10%.Assume that the shipment cost (Freight) is $1200. CF = $5000 plus $1200
Note: Insurance is invoiced on both the Goods Cost and the Freight Cost.
Consequently, if your insurance provider charges 0.5% for coverage on the products,
- Insurance = 0.005 x $6200 = $31
- CIF (Cost plus Insurance plus Freight) = $5,000 plus $31 plus $1,200.
- Now, CIF equals $6,231
This should ideally be translated to Naira using the official duty rate, which is N328.00.
- CIF – $6231 x N328 = N2,043,768.00
- Hardware cost must also be adjusted to Naira.
- Cost – $5000 x N328 = N1,640,000.00
- FOB – $5500 x N328 = N1,804,000.00
- 10% of CIF = 0.1 x 2,043,768 = N204,376.68 Import Duty Rate
- 7% of Import Duty Surcharge = 0.07 x 204,376.8 = N14,306.37
- 1% of FOB equals 0.01 x 1,804,000.00 = N18,040.00
- ETLS: 0.5% of CIF is equal to 0.005 x 2,043,768.00) = 0.05 x 20,437.68 = N10,218.84
- 7.5% multiplied by (CIF + ID + Surcharge + CISS + ETLS).
- 0.075 x (2,043,768 + 204,376.8 + 14,306.37 + 18,040 + 10,218.84)
- VAT = 0.075 x 2,290,710.01 = N171,803.25
To compute Customs Duty, all costs, including VAT, are added together.
ID plus surcharge plus CISS plus ETLS plus VAT equals customs duty.
204,376.8 + 14,306.37 + 16,400 + 10,218.84 + 171,803.25 = N417,105.26
Mr. Osagie must pay N417,105.26 in customs duty and other relevant taxes and levies to the Federal Government of Nigeria for the imported goods.
Customs Charge plus Cost of Items to Be Landed in Nigeria is now the entire amount to be paid, which includes CIF.
N2,043,768.00 + N417,105.26 = N2,460,873.26
Disclaimer. The Spreadsheet above is how the writer thinks Nigeria customs duties are calculated , so usage is at your own risk . Pls contact the Nigerian customs for your actual fees .