Soothing news broke today within the import community, as the presidential committee on fiscal policy and tax reforms has proposed N800/$1 as a suitable exchange rate for computing Customs import duty payments, urging the federal government to embrace it.
Taiwo Oyedele, chairman of the committee, stated this in Lagos on Thursday at an interface with journalists on the activities of the tax panel.
According to him, the proposition sprang from the discomforting impact of the tumbling naira and other volatilities in the foreign exchange market, which have somewhat foreclosed the possibility of achieving a stable exchange rate, which the import community needs to function efficiently.
If the government adopts the new rate, it is expected to lead to a remarkable drop in consumer prices of imported goods.
The Nigerian importers and agents have been tormented by unstable exchange rate in the last one year as the Central Bank of Nigeria (CBN) has severally adjusted the Customs exchange rate upward, reaching up to N1,481.482/$1 earlier in the year. But the rate today is N1,196, according to the information on the Nigerian trade portal on Thursday.
Oyedele said: “When we did the budget, we said naira to the dollar would be N800, now it is 1,000 something. People need to plan.
“We are saying that the government can sign an order that says N800 per dollar should be used for paying Customs duties for the rest of the year till December.
“So, we have proposed N800,” he said.
The committee’s proposal aligns with the popular opinion of industry stakeholders who called for hedging of the exchange rate for Customs duties to allow for planning.
Commenting on the development, the former acting National President of Association National Licensed Customs Agents (ANLCA), Dr. Farinto Kayode, told Daily Sun that the proposition was a soothing development. He, however, argued that N800/$1 may not work but N1,000/$1 to be more realistic.
“It is a good thing that committee is thinking in that direction, meaning that there is still light after the tunnel because our import percentage continues to drop on a daily basis.
“So, if the government can implement their policy, I’m concurring with their suggestion, but I’m suggesting 1000/$1. Let us have it as a flat rate for all Customs operations between now and the end of the year.
“By that time, it will assist the importers know that there is prediction in our foreign exchange, let me now go and import. It is a good one and a welcome development,” he said.
An importer and President, Association of Motor Dealers of Nigeria (AMDON), Prince Ajibola Adedoyin, said that the development is going to aid things like manufacturing and the transportation sector.
According to him, it is after the effect of the policy at the long run is going to be laudable because if one watches it, that same exchange rate is the major issue motor dealers have in terms of the cost of vehicles.
“You know apart from the fact that everything has gone up but if you look at it very well, it is the exchange rate that made the cost of vehicles to go up. So the policy will give more accessibility for Nigerians to be able to purchase cars.
“And at the end of the day, the policy is going to help the transportation industry, even too, is going to curb the rate of accident on our roads. So it will be a welcome idea if it being given a push and approved,” he added.
Kingsley Igwe, national secretary of the National Association of Government Approved Freight Forwarders, said the CBN should hedge or benchmark the FX rate for duty payment because the fluctuating rate is affecting investor confidence.
“The predictability of the cost of clearing in Nigeria is retrogressive due to the fluctuating FX rate for duty payment, which is not good for Nigeria’s logistics performance index rating,” Igwe said.
In the first quarter alone, a total of 28 rates were directed by the CBN for computing Customs duties, according to Wale Adeniyi, comptroller general of Customs.
