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Federal Executive Council approves new import levy

The Federal Executive Council has approved a rate of 0.2 percent on qualifying imports coming into Nigeria from the African Union (AU) countries. This approval is a sequel to the decision reached at the AU Summit for Heads of States and Government in July 2016 wherein all Member States were requested to implement a 0.2% levy on eligible imports.

 

Which country of origin will be affected?

Eligible goods coming into Nigeria from the African Union (AU) countries. The AU reflects all the countries on the African continent. Currently, there are 55 Member States in the AU.

 

What type of goods is eligible?

The AU import levy will apply to the

  • Cost, Insurance, and Freight (CIF) value at the port of arrival for imports coming into Nigeria by sea and road
  • Customs value at the airport of landing for goods arriving in Nigeria by air.

 

Are any goods exempted?

Yes. Exempted goods include:

  • Goods on which the import levy has been previously paid.
  • Goods coming into Nigeria from outside AU, that is, non-member countries for consumption and re-exported to another Member State;
  • Goods received as aid, gifts and non-repayable grants by Nigeria constituted under public law and intended for charitable works recognized as being for the common good;
  • Goods originating from non-Member States, imported as part of financing agreements with foreign partners, subject to a clause expressly exempting the goods from any fiscal or para-fiscal levy;
  • Goods imported into Nigeria prior to commencement of the import levy.

 

How will the revenue be allocated?

The Federal Government of Nigeria intends to finance the country’s subscription to the AU with revenue derived from import levy. The excess funds will be deposited with the Central Bank of Nigeria.

It is likely that the cost of cross-border trading between Nigeria and member countries will increase. However, the AU has issued Financial Rules and Regulations that will encourage a transparent and cautious use of import levy funds. If this financial control is followed correctly, Nigeria will offer sustainable funding to the AU for the execution of continental development and integration programs.

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