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How To Calculate Customs Duty Charge

A lot of people who deal in the business of importation and exportation always ask questions like,  “How to calculate import duty charge on your goods” “What amount is the Nigerian Custom duty charge on Imported vehicles”, etc. The main concern is, each shipper should be comfortable with the entire cycle of Cargo Import and Exports since import obligations are determined Depending on the nation and the figurings are done dependent on the kind of thing and its worth.

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To figure Customs duty charge, you should be acquainted with the accompanying terms:

  • 1. Free on Board or FOB is the expense of the transportation or taking care of. To utilize this figure in the count of Duty you should change over to Nigerian Naira for
  • 2. Freight is the expense of transporting the imported things to the assigned port of release whether via Sea, Air, or Road. This must likewise be changed over to Naira for example Cargo in the money of fare nation’s swapping scale
  • 3. CIF is Cost, Insurance, and Freight.

To get your CIF, basically add the expense of the things imported, the protection esteem (0.5% of FOB), and the expense of transportation, which is Freight.

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  • 4. Value Added Tax = 7.5% x (CIF + ID + Surcharge + CISS + ETLS). Where;
  • 5. Surface Duty (ID): This is frequently generally alluded to as import obligation. This is the manner by which the shortening (ID) settled. It is an obligation dependent on the sort of thing imported. The worth relies upon the HS Code – normally 5%, 10%, 20%, and so forth of the CIF Value.
  • 6. ID = x% of CIF Value. Import Duty is the assessment gathered on imported merchandise by customs.
  • 7. Overcharge: is an extra duty demanded on the importation of merchandise. It is intended for port turn of events.
  • 8. Formula: 7% x Import Duty (ID).
  • 9. CISS is an abbreviation for the ‘Comprehensive Import Supervision Scheme” Formula: 1% of FOB value.
  • 10. ETLS is an abbreviation for ECOWAS Tax Liberalization Scheme, it is additionally alluded to as ECOWAS demand. It is the expense forced on merchandise that is imported from ECOWAS non-part nations into ECOWAS part nations.
  • 11. In deciding the Customs Duty Charge, the initial step is to demand the HS Code. This will assist you with knowing the expense receivable by customs on bringing in the products, in any case, alluded to as Surface Duty.
How to check custom duty online in Nigeria
How to check custom duty online in Nigeria

How to Calculate Custom Import Duty Charge In Nigeria

Let us use the below illustration as an example.


Mr. Phillip is a financial specialist who sells and imports fabrics from different countries. He has just arranged fabrics from a Merchant in the United States for $7,000. He needed to pay other extra charges at the pace of $700. So his total FOB=$7,700. Presently, to decide the Custom Duty Charge, it is significant you realize the HS Code for that ware you convey. This will assist you with knowing the assessment receivable on your products by customs (surface duty).

The HS Code for Fabrics is 5407, so its import obligation is determined at a pace of 10%.

So accepting the expense of Freight is $1500. The CF= $7000+$1500.

Note that, Insurance is charged on both the expense of products and the expense of cargo. So in the event that the Insurance charged on your products is 0.5%, at that point Insurance = 0.005 x $8500= $42.5

Thus, CIF (Cost+ Insurance+ Freight) = 7000+ 42.5+ 1500. CIF = $8542.5

Presently, we convert to Naira, utilizing the authority rate for obligation. That is N430.00.

At that point CIF= $8542.5 X N430= N3,673,060

Cost of Fabrics changed over to Naira =

COST-$7000 X N430= N3,010,000.00

FOB= $7700 X N430= N3,311,000.00

Import Duty rate: 10% of CIF= 0.1 X 3,675,060 = N367,506

Surcharge: 7% of Import Duty= 0.07 X N367,506= N25,725.42

CISS: 1% of FOB=0.01 X N3,311,000.00 = N33,110.00

ETLS: 0.5% of CIF= 0.005 X N3,673,060 = N18,365.3

So VAT: 7.5% X (CIF + ID + Surcharge + CISS +ETLS)

0.075 X (3,673,060

 + 367,506 + 25,725.42 + 33,110.00 + 18,365.3)

VAT = 0.075 X 4, 117,766.72 = 308,832.504

For you to Calculate customs Import Duty, all charges will be added together including VAT

Thus, (ID + Surcharge + CISS + ETLS + VAT = Customs Duty)

367,506 + 25,725.42 + 33,110.00 + 18,365.3 + 308,832.504 = N753,539.224

So the Custom obligation and assessments that will be paid by Mr Phillip to the Federal Government of Nigeria is N753, 539.224 for his imported fabrics.

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