Everything You Need to Know About The Nigeria Customs Service

Everything You Need to Know About The Nigeria Customs Service

Nigeria customs service

If you’re involved in international trade, understanding customs procedures is crucial. However, customs regulations can be complex and difficult to follow for smooth operations and avoidance of potential sanctions. Hopefully, in this comprehensive guide, we will delve into what the average businessperson should know about the Nigeria customs service, covering key aspects from clearance processes to compliance requirements.

Let’s begin:

Why was the Nigeria Customs Service created?

Established during the 19th century, the Nigeria Customs Service (NCS), an independent body was created under the Federal Ministry of Finance for revenue collection through customs, aiming to ensure the integrity and security of Nigeria’s trade practices.

Why should you care?

If you’re involved in international trade, the NCS is a key player in ensuring the smooth movement of goods across borders. Its operations directly impact the efficiency and cost-effectiveness of your import or export ventures.

Undoubtedly, this is a major reason, but other duties of the service include:

Duties of the Nigeria Customs Service

  1. Revenue Collection

One of the Nigeria Customs Service (NCS) ‘s primary duties is collecting revenue, particularly taxes on goods that enter or leave the country.

This role plays a critical part in the economic structure of Nigeria and contributes substantially to the government’s financial resources. The fact that in July-August 2023 alone, they recorded a record monthly revenue of 343 billion Naira speaks volumes about their importance in contributing to the government’s financial resources.

  •  Supporting Legitimate Trade

The NCS makes business life easier. So, when you want to bring in your products for your business or send things out to other places, the NCS steps in to simplify everything. They become a helpful guide that removes the complicated parts of importing or exporting.

  • Protecting Nigeria’s Borders

The NCS works hard to stop smuggling and prevent illegal goods, like fake or sub-standard products, from entering the country. In the past year, they have worked earnestly to confiscate banned products, harmful or expired produce or outright illegal goods worth billions of Naira.

  • Enforcing Trade Regulations

Whenever new trade policies are introduced in Nigeria, NCS ensures that these regulations are universally adhered to.

The Customs Clearance Process

Now that you know the important roles the customs service plays, it’s time to dive into how you can ensure a smooth path for your products.

But first, make sure to pay attention to the import and export prohibition lists before jumping into any transactions. This way, you can easily navigate the customs clearance process and avoid unnecessary stress.

Now, let’s dive into the steps to ensure your journey through customs is as smooth as possible.

Steps to clear your goods at Customs

Step 1: Customs Paperwork Examination:

When your shipment arrives, a customs officer carefully checks your paperwork. This includes crucial documents like the shipping label and commercial invoice.

The commercial invoice is a star here, listing info about the shipper, receiver, export date, and airway bill number.

Step 2: Assessment of Import Duties and Taxes:

 Import duties and taxes are calculated based on the customs paperwork. This varies depending on your goods’ type, value, and the importing country’s specific regulations.

Step 3: Payment Request for Taxes and Duties:

If your shipment exceeds the tax threshold, customs will ask for payment of duties and taxes. This step is crucial, especially for certain restricted goods that may have additional fees.

Here’s where you choose between Delivery Duty Unpaid (DDU) and Delivery Duty Paid (DDP). DDP means you’ve already paid import fees, ensuring a smooth customs clearance.

Step 4: Final Customs Clearance and Delivery:

Once all duties are paid, your shipment clears customs. It’s smooth sailing from here, with your chosen delivery service taking your goods from customs to their final destination.

 Rarely do shipments get stuck at customs, and if they do, it’s usually due to paperwork glitches.

Tips for clearing your goods at customs.

According to the Nigeria Customs Service (NCS), there are 12 things stated as a “must know” on their official website about clearing of goods. They are:

  1. Payment of correct Customs Duties enhances national development. So pay your Customs Duties promptly.
  2. Hand over only certified cheques to your Agents.
  3. Demand receipt for all payments made.
  4. Patronize genuine Customs licensed Agents only.
  5. You can obtain a self-clearance license and clear your goods yourself.
  6. Avoid the use of touts in clearing your cargo.
  7. Make all certified cheques payable to the Federal Government of Nigeria through any of the approved designated banks.
  8. Report all cases of extortion or demand for gratification to the nearest Customs Area Controller or the Office of the Comptroller General of Customs in Abuja.
  9. Delay in clearance of imported goods attracts a fee and leads to overtime cargo.
  10. Ensure clearance of your goods within 90 days from the date of arrival at the seaports and 30 days at the airports.
  11. False declaration of goods will lead to outright forfeiture. Ensure correct declaration always.
  12. The use of fake documents is a crime when clearing your goods. This, apart from forfeiture of the goods, can lead you to jail. Always ensure the use of genuine Customs documents.

Rules and Regulations in the Nigeria Customs Service

In addition to the tips listed above, it is also essential to take note of the rules for dealing with customs.  Here’s a breakdown in a more casual tone:

  1. Paying Up: The Nigeria Customs Service (NCS) applies customs and excise tariffs based on the Customs Cooperation Council Nomenclature (CCCN).

If you’re bringing stuff into Nigeria, there are tariffs and duties you’ll need to pay. The amount depends on what you’re bringing in, and it’s in Nigerian naira.

  • Insurance Check: Special duties may be imposed on goods perceived as dumped or unfairly subsidized, posing a threat to domestic industries.

Your imported goods need to have their local insurance. So, make sure you’ve got that covered.

  • Special Fees: Duties paid on abandoned, re-exported, damaged, or destroyed goods may be refunded if a claim is made before the goods leave customs custody.

If the government thinks your goods are messing with the local market (like being too cheap or getting subsidies), they might include some extra fees.

  • Refund Alerts: Refund of duties for goods landed in another country requires a customs certificate.

If you paid duties on goods that end up abandoned, re-exported, damaged, or destroyed, you could get your money back. But, you must hurry to claim it before your stuff leaves customs custody. Just show them the customs certificate, then get your refund.

Finally, if you have complicated questions about all this, you can call the Nigeria Customs Service Headquarters or the Nigeria Trade Hub for help.

Penalties: What happens if you don’t abide by the rules?

If you don’t pay Excise duties, the fine is a whopping N5,000,000. Plus, if you keep messing up, it’s an extra N50,000 for every day you’re in default. And you might end up spending three years in jail.

Also, if you declare your goods for Excise duty and later they find out you were fibbing, not only do you lose the goods, but they’re immediately forfeited. No second chances.

FAQs on the Nigeria Customs Service

What is excise duty?

Excise duty is a type of tax imposed by the government on specific goods produced, sold, or consumed within a country. Unlike general sales taxes that apply to a wide range of goods and services, excise duties are usually targeted at specific products, often considered as non-essential or harmful, such as alcohol, tobacco, fuel, and certain luxury items.

What is Fast Track 2.0?

Fast Track 2.0 is the upgraded version of a system the Nigeria Customs Service (NCS) uses to make importing goods easier. They launched it on May 31, 2023, to simplify things for people bringing stuff into Nigeria.

Unlike the older version, FT 2.0 is open to everyone who imports, as long as they follow the rules set by the NCS.

Benefits of using Fast Track 2.0

  1. Speedy Clearance: With FT 2.0, your imported goods get a faster pass through customs. Less waiting, more doing business.
  2. Know Your Costs: You can get an early heads-up on how much you need to pay in duties and taxes.
  3. Pay Upfront: Instead of paying when your goods arrive, FT 2.0 lets you prepay duties, VAT, and other fees.

Requirements to join Fast Track 2.0

To join FT 2.0, you need to be a good player and follow the NCS rules. They’re still figuring out all the details, but you can sign up on their portal if you’re interested.

How long do customs take?

Typically, a customs clearance takes less than 24 hours. If your paperwork is lacking, however, it could take several days before your shipment clears customs.

Conclusion

The average businessperson needs to have a full understanding of customs clearance processes, duties, taxes, compliance requirements, and collaboration with customs authorities.

With this knowledge in hand, we hope this article has empowered you to streamline operations, and actively contribute to the success of your international trade ventures. Good luck!

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