Tax reform committee proposes N800/$ as customs import duty rate

The presidential committee on fiscal policy and tax reforms says it has asked the federal government to adopt an exchange rate of N800 per dollar for customs import duty.

Taiwo Oyedele, chairman of the committee, spoke on Thursday while engaging journalists on the activities of the tax panel in Lagos.

While presenting some recommendations of the committee, the tax expert expressed concern over the import duty rate which constantly changes due to the volatility of the foreign exchange (FX) market.

This, Oyedele said, does not allow for adequate planning by businesses.

“When we did the budget, we said naira to dollar will be N800, now it is 1,000 something. People need to plan,” he said.

“So now, we’re saying dear government can you please sign an order that says for the purpose of paying import duty, we shall use N800… for the rest of the year till December.

“So, we have proposed N800.”

Oyedele said since the government used N800/$ to plan the budget, they will not be losing anything if they use the same exchange rate for import duty collection.

He said adopting the proposed import duty FX rate would help the economy in terms of bringing down the price of importation which would also help with inflation.

“It would also help with stability and planning. So, somebody who is opening an LC for something that will arrive in two months, he needs to take a loan from the bank,” the tax expert said.

“You know the amount they’re charging you for the item, you need to worry about exchange rates for the goods.

“You don’t have to also worry about exchange rate for the import duty, even if he’s not a permanent solution. Let’s do this between now and December.

“When the economy stabilizes, the exchange rate itself would also stabilize and this will no longer be necessary, but in the meantime, we do think it’s a good idea for governments to adopt.”

In recent times, the import duty rate has witnessed incessant adjustments by The Nigerian Customs Service (NCS).

On May 27, the customs adjusted the FX rate for tariffs and duties to N1,480 per dollar.

Customs typically adopt FX rates recommended by the Central Bank of Nigeria (CBN) for import duties based on trading activities in the official FX market.

On May 16, Muda Yusuf, the director-general of the Centre for the Promotion of Private Enterprise (CPPE), said the customs should set a quarterly exchange rate between N800/$ and N1000/$ for import duties assessment.