• Friday, April 12, 2024
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BusinessDay

Despite high tariffs, Customs revenue declines 7.1% as import volume drops

Despite increasing the tariffs paid on imports by over 82.3 percent due to the adjustments in the exchange rate for calculating import duties, the Nigeria Customs Service (NCS) has collected about 7.1 percent less revenue than it did in 2022.

According to information made available to the Punch, Customs collected a total of N1.3 trillion in the first six months of this year, representing a 7.1 percent shortfall from a total of N1.4 trillion collected in the same period of 2022.

This is despite the high import duties paid by importers for bringing cargo into the country within the period under review as Customs increased the exchange rate for cargo clearing at the port from N422.3/$ to N589.45/$ in June.

The Service did not stop there as it further adjusted the rate to N770.88/$ in the month of July in line with the introduction of the Floating Exchange Rate Regime instituted by the Central Bank of Nigeria.

The information available to BusinessDay also revealed that import volume recorded a significant drop within the first half of the year.
A total of 1,851 vessels visited Nigerian seaports with about 707,985 Twenty-foot Equivalent Units (TEUs) of containers and 33,895,784 metric tons of cargo throughputs in the first half of 2023, according to the half-year report of the Nigerian Ports Authority (NPA).

Read also: Nigeria’s capital importation hits $1.1 bn in Q1 2023

The vessels had a combined Gross Registered Tonnage (GRT) of 57,870,083, and they facilitated international trade in Nigeria by bringing imports and taking out export within the period under review.

This represents a 16.6 percent drop when compared to 849,175 TEUs of containers brought into the country by 1,992 ships with an aggregate gross registered tonnage of 60.2 million tons that were received in the country within the same period in 2022.

Emma Nwabunwanne, a Lagos-based importer, said he was not surprised that the volume of business at the port slowed owing to the naira redesign policy that slowed economic activities in the first quarter of the year.

While pointing out that the high tariffs should have helped Customs to close the revenue gap, Nwabunwanne said that Customs is at an advantage to increase its revenue because the FX rate used last year was lower than the rate used today.

He however blamed the continuous rise in FX rates used in calculating import tariffs and the difficulty in accessing FX as factors that contributed to a decline in the volume and revenue collected by Customs.

On his part, Tony Anakebe, a Customs Licensed Agent, said he is not surprised that import volume and Customs revenue have dropped.

According to him, the revenue is a reflection of the low volume of business at the port, which he predicted will further drop as the harsh economic situation in the country take its toll on more Nigerians.