The Presidential Committee on Fiscal Policy and Tax Reforms has put forward a proposal that the exchange rate for customs import duty be set at N800 per dollar, seeking to create a potential shift in Nigeria’s existing tax policy in order to foster greater fiscal efficiency.
Taiwo Oyedele, chairman of the committee, presented the recommendation during a recent press briefing in Lagos, noting that the proposed measure was aimed at supporting the federal government’s fiscal reforms.
Discussing the challenges that businesses encounter due to the volatility of the foreign exchange market, which can lead to frequent changes in import duty rates, Oyedele,, stressed the importance of stability in the economy to allow businesses to plan effectively.
Oyedele stated: “When we did the budget, we said naira to dollar will be N800, now it is 1,000 something. People need to plan.”
The renowned policy analyst and commentator on finance, business, and economic matters, highlighted the importance of fiscal reforms in Nigeria by calling on the federal government to issue an order setting the exchange rate for customs import duties at N800 per dollar for the rest of the year. Oyedele explained that the measure requires immediate action in the interests of the country’s economic stability and well-being.
The Nigeria Customs Service determines the exchange rate for import duties by adopting the foreign exchange rates recommended by the Central Bank of Nigeria , based on trading activities in the official FX market. Following the CBN’s recent recommendation based on official FX market trading activities, NCS set the exchange rate at N1,480 per U.S. dollar on May 27.
Echoing the sentiments of business operators and analysts in the private sector, Muda Yusuf, director-general of the Centre for the Promotion of Private Enterprise (CPPE), identified a critical need to fix import duty rates to mitigate the inflationary pressures driven by rising trade costs.
Yusuf identified the customs authorities’ continuous adjustment of the foreign exchange rate for tariffs and duties as one of the significant factors contributing to inflation. To address this issue, Yusuf urged customs authorities to set a fixed quarterly exchange rate for import duties assessment within the range of N800 to N1000 per dollar.
