New 4% Customs Levy Will Raise Prices and Hurt Businesses in Nigeria

The Nigeria Customs Service (NCS) has introduced a 4% Customs administration charge on the Free on Board (FOB) value of imports, as stated in the Nigeria Customs Service Act, 2023. This new levy has faced strong opposition from business leaders, including the Nigeria Employers’ Consultative Association (NECA) and former Senate President Bukola Saraki, who believe it will worsen Nigeria’s economic challenges.

Many businesses in Nigeria are already struggling with high costs, multiple taxes, and economic uncertainty. Adding a 4% charge on imports means that businesses will pay more for goods, and these extra costs will be passed on to consumers. This will lead to higher prices for everyday items, making life harder for Nigerians who are already dealing with inflation and rising living costs.

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Another major concern is that this levy contradicts the government’s Ease of Doing Business agenda. Instead of making it easier for businesses to grow, the government is introducing more financial burdens that could force many companies to shut down. When businesses struggle, they lay off workers, reduce investments, and contribute less to the economy, which could increase unemployment and poverty.

Economists and industry experts have suggested better ways for the government to generate revenue without harming businesses and consumers. They recommend expanding the tax base, improving tax collection, cutting unnecessary government spending, and encouraging local production. These steps would boost government revenue while also supporting businesses and economic growth.

The 4% Customs levy might help the government raise money in the short term, but in the long run, it could lead to higher inflation, business closures, and increased hardship for millions of Nigerians. Many are calling on the government to reconsider the levy and find a better way to support economic growth without making life harder for businesses and consumers.

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