What is Customs Duty in Nigeria?

Customs duty is a tariff imposed by the Federal Government of Nigeria through the Nigeria Customs Service (NCS) on goods imported into the country. Whether you’re importing from China, the U.S., or Europe, customs duty is a mandatory charge you must pay to clear your shipment at any Nigerian port.

With the introduction of Nigeria Customs Duty Reforms (2025), understanding how these charges are calculated is more important than ever to avoid surprises and stay compliant.

Why Customs Duty Matters

Here’s why customs duty is critical in Nigeria’s trade ecosystem:

• ✅ Revenue generation: It funds government budgets and development initiatives.

• ✅ Trade regulation: It helps control the flow of foreign goods into Nigeria.

• ✅ Protection for local industries: It discourages excessive foreign competition by increasing import costs.

Key Customs Terms You Must Know

Before you start calculating customs charges, understand these important terms used by Nigerian Customs and freight forwarders:

1. FOB (Free on Board)

This refers to the invoice value of your shipment — the total cost of getting the goods to the shipping terminal in the origin country (before export).

Formula:
📌 FOB = Total Ancillary Charges + Value of Goods

🧾 Includes packaging, local transport, loading costs, etc.

2. Freight

The cost of transporting your goods to Nigeria’s port of entry (via sea, air, or road).

🚢 Used when calculating the CIF value.

3. CIF (Cost, Insurance, Freight)

CIF is the total landed cost of goods in Nigeria — it includes the cost of goods, freight, and insurance.

Formula:
📌 CIF = Cost + Freight + Insurance (0.5% of Cost + Freight)

🧾 This value forms the basis for calculating most duties.

4. Import Duty (ID)

Also called the surface duty, it is charged as a percentage of the CIF value. The rate depends on your product’s HS code, typically ranging from 5% to 20%.

Formula:
📌 Import Duty = x% of CIF

🔗 Check applicable duty rates via Nigeria Customs HS Code Lookup

5. Surcharge

An additional levy used to support port operations.

Formula:
📌 Surcharge = 7% x Import Duty

6. CISS (Comprehensive Import Supervision Scheme)

A regulatory charge introduced to fund inspection and compliance processes.

Formula:
📌 CISS = 1% of FOB

🔗 More on CISS explained by NCS

7. ETLS (ECOWAS Trade Liberalisation Scheme)

This is a regional levy for goods imported from outside ECOWAS countries.

Formula:
📌 ETLS = 0.5% x FOB

🔗 Learn about ETLS from ECOWAS

8. VAT (Value Added Tax)

Applied on the sum of CIF + Import Duty + Surcharge + CISS + ETLS.

As of now, VAT is 7.5%, but under the proposed Nigeria VAT reforms 2025, this rate could increase to 10%, 12.5%, or even 15%.

Formula:
📌 VAT = 7.5% x (CIF + Import Duty + Surcharge + CISS + ETLS)

🔗 See VAT guidance via FIRS Nigeria

Step-by-Step Calculation Example

Let’s take a practical example to illustrate the process:

Imagine Mr. Sodiq Adeleke, an eCommerce entrepreneur, is importing fabrics from India valued at $5,000.

1. 1. FOB Calculation: Invoice value = $5,000
   2. Freight Cost:Freight = $1,200
   3. Insurance (0.5% of Cost + Freight):Insurance = 0.5% x ($5,000 + $1,200) = $31
   4. CIF Calculation:CIF = $5,000 + $1,200 + $31 = $6,231
   5. Conversion to Naira (Official Rate: N1500/$): CIF in Naira = $6,231 x N1500 = N9,346,500

1. 1. Import Duty (10% of CIF):ID = 10% x N9,346,500 = N934,650
   2. Surcharge (7% of Import Duty): Surcharge = 7% x N934,650 = N65,425.
   3. CISS (1% of FOB): CISS = 1% x N1,804,000 = N18,040
   4. ETLS (0.5% of FOB): ETLS = 0.5% x N1,804,000 = N9,020.
   5. VAT Calculation (7.5% of total charges):VAT = 7.5% x (N9,346,500 + N934,650 + N65,425.5 + N18,040 + N9,020) = N10,373,635.5
   6. Total Customs Duty Charges:Customs Duty = N934,650 + N65,425.5 + N18,040 + N9,020 + N10,373,635.5 = N11,400,771

Impact of Nigeria’s 2025 Tax Reforms

The proposed Nigeria tax reform bill 2025 could introduce major changes, such as:

• • VAT Increase: Expected rise to 10%, 12.5%, or 15%.

• • Corporate Income Tax Reduction: Potential decrease from 27.5% to 25%.

• • Exemptions: VAT exemptions on essential items like pharmaceutical products and medical devices.

• • Regional Economic Impact: Measures to bridge the north-south economic divide.

Conclusion

Understanding how to calculate customs duty charges in Nigeria is vital to prevent overpayment and avoid unnecessary delays. With upcoming regulatory changes, businesses must stay updated to ensure compliance and smooth import operations.

Need Expert Assistance?

For hassle-free customs clearance and professional advice, contact Bowa Gate Global Ltd:

• • Call: +2348147068472, +2348095788867

• • Email: [email protected]

Stay tuned to our blog for the latest updates on Nigeria tax reforms legislative process and customs duty developmen