The presidential committee on fiscal policy and tax reforms says it has asked the federal government to adopt an exchange rate of N800 per dollar for customs import duty.
Taiwo Oyedele, chairman of the committee, spoke on Thursday while engaging journalists on the activities of the tax panel in Lagos.
While presenting some recommendations of the committee, the tax expert expressed concern over the import duty rate, which constantly changes due to the volatility of the foreign exchange (FX) market.
This, Oyedele said, does not allow for adequate planning by businesses. “When we did the budget, we said naira to dollar would be N800; now it is something like 1,000. People need to plan.
“So now, we’re saying, dear government, can you please sign an order that says for the purpose of paying import duty, we shall use N800… for the rest of the year till December? So, we have proposed N800.”
He said adopting the proposed import duty FX rate would help the economy in terms of bringing down the price of importation, which would also help with inflation.
“It would also help with stability and planning. So, somebody who is opening an LC for something that will arrive in two months needs to take a loan from the bank. You know the amount they’re charging you for the item, you need to worry about exchange rates for the goods.
“You don’t have to also worry about the exchange rate for the import duty, even if it’s not a permanent solution. Let’s do this between now and December. When the economy stabilizes, the exchange rate itself will also stabilize and this will no longer be necessary, but in the meantime, we do think it’s a good idea for governments to adopt,” the tax expert said.
In recent times, the import duty rate has witnessed incessant adjustments by the Nigerian Customs Service (NCS).
On May 27, customs adjusted the FX rate for tariffs and duties to N1,480 per dollar.
Customs typically adopt FX rates recommended by the Central Bank of Nigeria (CBN) for import duties based on trading activities in the official FX market.
On May 16, Muda Yusuf, the director-general of the Centre for the Promotion of Private Enterprise (CPPE), said the customs should set a quarterly exchange rate between N800/$ and N1000/$ for import duty assessment.
