Tensions are escalating between the Central Bank of Nigeria (CBN) and the Nigeria Customs Service (NCS) over the determination of foreign exchange (FX) rates used in calculating import duties. The CBN has doubled down on its position, underlining that the FX rate at the close of business on the date an importer submits Form M, a crucial document for importation, should be the foundational metric for duty computations.
In an exclusive interview with The Nation, a CBN official clarified that the apex bank disavows any ambiguity regarding the FX rate applicable to import duties. The CBN pointed to an official circular delineating the usage of the FX rate on the submission date of Form M. The central bank asserts that any deviation from this directive lies squarely with the NCS, absolving importers of responsibility. Highlighting the transparency of its directive, the CBN stressed that the circular outlining the daily FX rate policy is readily accessible on its official website. This accessibility aims to ensure clarity for all stakeholders involved in the importation process.
Furthermore, the CBN clarified that the enforceability of the policy remains intact even if the NCS did not physically receive the circular. The mere presence of the circular on the CBN’s website is deemed sufficient to establish its validity and mandate its implementation. According to the official, “It is not on us; we have issued a circular on the need to use the day’s rate; that is the day the importer fills the form M to calculate the duty due importers. If they (Nigeria Customs) don’t comply, it is not our issue. They can’t say they didn’t see the circular because the circular was on our site. Whether the circular was handed over to them or not does not stop it from being binding”.
The CBN’s position comes amid reports that the NCS has continued to utilise the exchange rate prevailing on the date of clearing goods, not the date on Form M as directed by the CBN. This practice puts importers at a disadvantage, as the naira’s depreciation translates to higher import duties when a later exchange rate is used. The discrepancy in FX rate application creates uncertainty and potential financial strain for importers, as businesses may face difficulties in accurately budgeting and pricing their imported goods due to fluctuating import duty costs. The CBN’s firm stance highlights the need for a clear resolution between the two government agencies. Consistent application of the daily FX rate policy, as outlined by the CBN, would promote transparency and predictability for import businesses. Stakeholders are watching closely to see if the NCS will adhere to the CBN’s directive, ultimately impacting the ease of doing business in Nigeria.
