CUSTOMS AND EXCISE DUTIES IN NIGERIA: NATURE, ADMINISTRATION, ASSESSMENT, AND COMPLIANCE UNDER NIGERIA’S 2025 TAX LAWS
Nigeria’s customs and excise landscape has changed dramatically. The new Nigeria Customs Service Act (NCSA) 2023, the Nigeria Tax Act (NTA) 2025, and the Nigeria Tax Administration Act (NTAA) 2025 have reshaped how import duties, excise taxes, and related levies are administered. If your business imports goods or manufactures products subject to excise duties, you need to understand these changes.
Get this wrong, and you will overpay duties, face penalties, or struggle with compliance. Get it right, and you unlock significant cost savings and avoid regulatory headaches. This guide breaks down everything: the nature of customs and excise duties, the new administration framework, assessment methods, and practical compliance strategies. Let us get into it.
The Pain Points: Why Businesses Struggle with Customs and Excise Compliance
Confusion Over the New 4% FOB Levy
The Nigeria Customs Service Act 2023 introduced a unified 4% Free-on-Board (FOB) charge on imports, replacing the old 1% Comprehensive Import Supervision Scheme (CISS) and 7% cost of collection. The idea was to streamline charges and improve transparency. However, its implementation has been chaotic.
The 4% FOB levy was introduced, then suspended in February 2025 to allow stakeholder consultations, then reportedly reintroduced in August 2025. Even more confusing, some reports suggest the old CISS and 7% charges remain in place, effectively compounding the total cost of importation rather than replacing them as promised. This policy flip-flop has left importers confused, frustrated, and facing significant cost increases.
The Cost Impact on Importers and Consumers
The 4% FOB levy has had a significant impact on import costs. Car importers have reported that the levy, combined with the reintroduction of the VIN (Vehicle Identification Number) valuation system, pushed clearing costs up by millions of naira. A 2016 Mercedes GLE that previously cost N4-5 million to clear rose to N10 million. These costs are inevitably passed on to consumers.
The Organised Private Sector has warned that the levy is “bleeding the manufacturing sector” and could worsen Nigeria’s export competitiveness. While the government exempted manufacturers importing raw materials, machinery, and spare parts under Chapters 98 and 99 of the Customs Tariff from the 4% FOB levy, confusion over the exemptions persists.
The Proposed SSB Excise Duty Hike
A proposed amendment to the Customs and Excise Tariff (Consolidation) Act seeks to increase the excise duty on Sugar-Sweetened Beverages (SSBs) from the current N10 per litre to as high as N130 per litre—an effective hike of over 1,200%. Proponents argue this aligns with WHO recommendations to curb non-communicable diseases like diabetes and hypertension. The Coordinating Minister of Health has backed the proposal, citing local studies showing such an increase could raise retail prices by 39% and reduce per-capita SSB consumption by 29%.
The Economic Risks of the SSB Tax Hike
The proposed SSB tax hike has sparked fierce opposition. The Manufacturers Association of Nigeria (MAN) warned that the tax threatens a sector responsible for about 33% of Nigeria’s manufacturing output and over 1.5 million direct and indirect jobs. The Lagos Chamber of Commerce and Industry warned that the tax could worsen inflationary pressures and reduce demand for locally manufactured products.
Critics argue the tax could push consumers to cheaper, unregulated alternatives, undermining both health and economic objectives. There are concerns about policy incoherence—the government promotes local sugar production through the Nigerian Sugar Master Plan while the National Assembly proposes a tax that strangles demand for that very sugar.
Policy Incoherence Between Executive and Legislative Branches
The SSB tax debate has highlighted a policy clash between the Executive and the National Assembly. The Ministry of Finance maintains that Section 13 of the existing law allows the President to impose or vary excise duties based on macroeconomic realities. The National Assembly asserts its authority to amend the law. This tug-of-war creates uncertainty for businesses and sends confusing signals to domestic and international investors.
The Cost of Getting It Wrong
Businesses that fail to comply with customs and excise requirements face serious consequences. Penalties for incorrect declarations, undervaluation, or non-payment can be severe. Importers have reported significant cost increases due to policy changes, and those who fail to adapt may find themselves unable to compete.
Nature of Customs and Excise Duties
Customs Duties
Customs duties are taxes imposed on goods imported into or exported from Nigeria. They are primarily governed by the Nigeria Customs Service Act (NCSA) 2023 and the Customs and Excise Tariff (Consolidation) Act.
Types of Customs Duties:
Import Duties: Levied on goods brought into Nigeria
Export Duties: Levied on goods leaving Nigeria
Excise Duties: Levied on goods manufactured locally
The standard customs duty rates vary by product classification under the Harmonized System (HS) code. Some goods attract higher duties to protect local industries, while others benefit from lower rates or exemptions.
The 4% FOB Levy Under the NCSA 2023
The NCSA 2023 introduced a unified 4% Free-on-Board (FOB) charge on imports, replacing the previous 1% CISS and 7% cost of collection. The objective was to simplify the revenue structure and ensure sustainable funding for customs operations and modernisation initiatives.
What is FOB Value? FOB stands for “Free on Board.” It represents the value of goods at the point of shipment, excluding insurance and freight costs. The 4% FOB levy is calculated on this value.
Exemptions: The Federal Government has exempted certain imports from the 4% FOB levy, including:
Manufacturers importing raw materials, machinery, and spare parts under Chapters 98 and 99 of the Customs Tariff
Government projects with duty exemption certificates
Humanitarian imports
Healthcare related goods
Commercial airline spare parts
Excise Duties
Excise duties are taxes on goods manufactured locally in Nigeria. They apply to specific products, such as alcoholic beverages, tobacco, sugar-sweetened beverages, and motor vehicles.
Purpose of Excise Duties:
Generate government revenue
Discourage consumption of harmful products (health objectives)
Protect local industries
Current SSB Excise Duty: The current excise duty on sugar-sweetened beverages (SSBs) is N10 per litre. The proposed amendment seeks to replace this flat-rate levy with a percentage-based excise duty linked to retail prices, with rates potentially as high as N130 per litre.
Taxes Repealed or Suspended Under the NTA 2025
The Nigeria Tax Act 2025 has repealed, reversed, or suspended several taxes, including:
5% Excise Tax on Airtime & Data
Cybersecurity Levy on Money Transfers
Carbon Tax on Single-Use Plastics
Excise Tax on Imported Vehicles
Import Duties on Food Items, Agric & Pharmaceuticals
4% Import Levy (suspended for further consultation)
FRCN Charge on Private Companies
Expatriate Employment Levy
Administration of Customs and Excise Duties
The Nigeria Customs Service (NCS)
The Nigeria Customs Service is the primary agency responsible for collecting customs and excise duties. Under the NCSA 2023, the NCS has been empowered to modernise its operations through various technological innovations.
The Nigeria Revenue Service (NRS)
Under the Nigeria Revenue Service (Establishment) Act 2025, the NRS (formerly FIRS) has been established as the sole revenue collection agency of the Federation. This means the NRS will take over revenue collection functions from other agencies, including the Nigeria Customs Service, so they can focus on administration.
This is a significant change. The NCS will focus on trade facilitation and customs administration, while the NRS handles revenue collection. The transition is ongoing, and businesses may experience some disruption.
The Joint Revenue Board and Tax Ombud
The Joint Revenue Board of Nigeria (Establishment) Act 2025 establishes the Joint Revenue Board (JRB), the Tax Appeal Tribunal, and the Office of the Tax Ombud. The JRB will resolve disputes between the NRS and different tax authorities, while the Tax Ombud will serve as an independent arbiter to review complaints relating to tax, levy, customs duty or excise matters.
The NCSA 2023 Digital Transformation
The NCSA 2023 has introduced a major digital transformation initiative at the NCS. The law authorises the development and maintenance of electronic systems for information exchange between the Service, other government agencies, and traders.
Digital Solutions Implemented:
B’Odogwu Clearance System: A homegrown digital solution for faster clearance times and improved transparency
Single Window Implementation: Allowing traders to submit all import and export documentation through a single platform
Risk Management Systems: Technology-driven risk assessment to target high-risk consignments
Non-Intrusive Inspection Equipment: Scanning technology to reduce physical inspections
Electronic Data Exchange Facilities: Seamless information sharing between government agencies
Assessment of Customs and Excise Duties
Valuation Methods
Customs duties are assessed based on the value of imported goods. The standard method is the Transaction Value method, which uses the price paid or payable for the goods.
Common Valuation Methods:
Transaction Value: The price actually paid or payable for the goods
Transaction Value of Identical Goods: For goods with no direct transaction value
Transaction Value of Similar Goods: For goods with no identical or similar transaction value
Deductive Value: Based on the selling price in Nigeria
Computed Value: Based on the cost of production plus profit
Fallback Method: A reasonable method determined by the Customs officer
VIN Valuation System
The Vehicle Identification Number (VIN) valuation system has been reintroduced for imported vehicles. Under this system, once Customs inputs the chassis number into the system, the value it brings up is final—there is no room for negotiation. This has significantly increased clearing costs for vehicle importers.
The CISS Levy Controversy
The House of Representatives has ordered the NCS to stop collecting the Comprehensive Import Supervision Scheme (CISS) levy, arguing it is not backed by any law in the Nigerian legal framework. The CISS originated during the military era and was never passed by the National Assembly. The House has warned of legal action if the NCS continues with the CISS.
Customs and Excise Tariff (Consolidation) Act Amendment 2025
The proposed amendment to the Customs and Excise Tariff (Consolidation) Act 2025 seeks to replace the current flat-rate excise duty on sugar-sweetened beverages with a percentage-based levy linked to retail prices. The exact structure of the levy would be determined by the Minister of Finance.
Import Duty Exemptions and Waivers
The Federal Government issues Import Duty Exemption Certificates (IDECs) for various categories of imports. In 2025, IDEC approvals reached about N34 trillion, with roughly 60% granted for military hardware imports due to security challenges.
The NCS has called on the National Assembly to review the import duty waiver and concession policy, arguing that lawmakers should determine whether the incentives still justify their financial cost.
Compliance Under Nigeria’s 2025 Tax Laws
Filing Requirements
Businesses must comply with customs and excise filing requirements to avoid penalties. This includes submitting accurate declarations, paying duties on time, and maintaining proper records.
Key Filing Deadlines:
Import declarations must be submitted before goods are cleared
Excise duty returns must be filed monthly
Customs duties must be paid before goods are released
Record-Keeping Requirements
Businesses must maintain proper records to support their customs and excise declarations. This includes:
Invoices and receipts
Shipping documents
Customs declarations
Payment records
Correspondence with customs authorities
Penalties for Non-Compliance
Penalties for customs and excise non-compliance can be significant. They include:
Fines and penalties for incorrect declarations
Interest on unpaid duties
Seizure of goods
Criminal prosecution in severe cases
Suspension of import/export privileges
Best Practices for Customs and Excise Compliance
Stay Informed: Keep up to date with changes in customs and excise laws. The 2025 reforms have introduced significant changes, and the implementation is evolving.
Understand Your Obligations: Know what duties and levies apply to your imports and products. Seek professional advice if you are unsure.
Maintain Proper Documentation: Keep accurate records of all imports, exports, and manufacturing activities. This will help you comply with filing requirements and defend against audits.
Use Technology: Take advantage of digital platforms like the B’Odogwu clearance system to streamline your compliance processes.
Seek Professional Guidance: Customs and excise compliance is complex. Engage a professional advisor who understands the new laws and can help you navigate the changes.
How Qeeva Advisory Helps You Navigate Customs and Excise Compliance
We understand that customs and excise duties can be complex. The new laws, policy flip-flops, and ongoing reforms create uncertainty for businesses. Our professionals specialise in tax advisory, regulatory compliance, and customs administration.
Our Advisory Services Nigeria help you understand the new customs and excise rules, classify your goods correctly, and build strategies that minimise your duty exposure while ensuring full compliance.
Our Tax Strategies and Planning services help you navigate customs valuation, claim available exemptions, and manage excise duty compliance.
Our Regulatory Compliance services ensure your business meets all filing requirements and stays in good standing with the Nigeria Customs Service and Nigeria Revenue Service.
Our Bookkeeping Services ensure your records are accurate and complete, supporting your customs and excise declarations.
Our Risk Management services help you identify and manage risks associated with customs audits, valuation disputes, and compliance gaps.
Our Business Plan Service helps you incorporate customs compliance into your overall business strategy.
Our Management Consulting services provide comprehensive support for trade facilitation, supply chain optimisation, and customs process improvement.
Our Internal Control Services help you strengthen your internal controls to ensure accurate customs declarations and duty payments.
Our Service Methodology
We do not do generic. We do thorough, transparent, and actionable.
Step 1: Customs and Excise Assessment
We assess your current import and manufacturing activities, duty payments, and compliance processes. We identify gaps, risks, and opportunities for duty optimisation. This step draws on our Advisory Services Nigeria expertise.
Step 2: Classification and Valuation Review
We review your product classifications under the Harmonized System (HS) and ensure accurate valuation. We identify opportunities for duty savings through proper classification and valuation methods. Our. Tax Strategies and Planning team ensures your declarations are accurate
Step 3: Exemption and Incentive Claims
We help you identify and claim available duty exemptions and incentives, including the Chapters 98 and 99 exemptions for manufacturers and Import Duty Exemption Certificates. Our Regulatory Compliance team ensures your claims are properly documented and supported.
Step 4: Compliance and Filing Support
We help you prepare and file customs and excise returns accurately and on time. We ensure compliance with all regulatory requirements. Our Bookkeeping Services ensure your records are audit-ready.
Step 5: Ongoing Monitoring and Support
Customs and excise compliance is not a one-time exercise. We help you monitor changes in the law, update your processes, and stay current with regulatory developments. We provide ongoing support through our Advisory Services Nigeria , Regulatory Compliance , and Risk Management services.
Frequently Asked Questions
Q: What is the 4% FOB levy?
A: The 4% FOB levy is a unified charge on imports introduced by the Nigeria Customs Service Act 2023, replacing the old 1% CISS and 7% cost of collection.
Q: Is the 4% FOB levy currently being collected?
A: Implementation has been suspended and partially reinstated. There is significant confusion. Seek professional advice on the current status.
Q: What is the current SSB excise duty rate?
A: The current excise duty on sugar-sweetened beverages is N10 per litre. A proposed amendment seeks to increase this significantly.
Q: What is the VIN valuation system?
A: The VIN valuation system uses the Vehicle Identification Number to determine the value of imported vehicles. The value is final and non-negotiable.
Q: What taxes have been repealed under the NTA 2025?
A: The NTA 2025 repealed the 5% excise tax on airtime and data, cybersecurity levy, carbon tax, excise tax on imported vehicles, import duties on food items, the 4% import levy (suspended), FRCN charge, and expatriate employment levy.
Q: What is the Nigeria Revenue Service (NRS)?
A: The NRS is the new sole revenue collection agency of the Federation, replacing FIRS and taking over revenue collection from other agencies.
Q: What is the B’Odogwu clearance system?
A: B’Odogwu is a digital clearance system that speeds up customs processing and improves transparency.
Q: What are the penalties for customs non-compliance?
A: Penalties include fines, interest, seizure of goods, criminal prosecution, and suspension of import privileges.
Q: How can Qeeva Advisory help with customs and excise compliance?
A: We provide assessment, classification review, exemption claims, compliance support, and ongoing monitoring to help you navigate the new customs and excise regime.
Q: What are the exemptions from the 4% FOB levy?
A: Exemptions include manufacturers importing raw materials, machinery, and spare parts under Chapters 98 and 99, government projects, humanitarian imports, healthcare goods, and commercial airline spare parts.
The Bottom Line
Nigeria’s customs and excise landscape has changed significantly. The 4% FOB levy, the proposed SSB excise duty hike, and the establishment of the NRS as the sole revenue collection agency are major developments. The policy incoherence between the Executive and Legislative branches creates uncertainty, and the implementation of the 4% FOB levy has been chaotic.
But there are opportunities for businesses that are prepared. Proper classification, accurate valuation, and diligent compliance can result in significant cost savings. The exemptions for manufacturers are valuable, but they require proper documentation and claims.
Your job is to be prepared. Understand the new laws. Classify your goods correctly. Claim available exemptions. Maintain proper records. Seek professional guidance.
With the right approach and the right partner, you can turn customs and excise compliance from a burden into a competitive advantage.
The choice is yours.
Suggested Reading from Our Blog
Capital Allowance Under the Nigeria Tax Act 2025 – Learn how import duties affect your capital allowance claims.
Current Developments in Management Accounting – Understand how management accounting supports compliance.
Related Services
Our Advisory Services Nigeria are staffed by professionals specialising in customs and excise advisory, tax planning, and regulatory compliance.
Our Tax Strategies and Planning services help you navigate customs valuation, claim exemptions, and manage excise duty compliance.
Our Regulatory Compliance services ensure your business meets all filing requirements and maintains good standing with regulatory authorities.
Our Bookkeeping Services ensure your records are accurate and complete, supporting your customs and excise declarations.
Our Risk Management services help you identify and manage risks associated with customs audits and compliance gaps.
Our Business Plan Service helps you incorporate customs compliance into your overall business strategy.
Our Management Consulting services provide comprehensive support for trade facilitation and customs process improvement.
Our Internal Control Services help you strengthen your internal controls for accurate customs declarations.
Let’s Talk About Your Customs and Excise Compliance
Navigating Nigeria’s new customs and excise regime can feel overwhelming. At Qeeva Advisory, we understand the challenges businesses face under the 2025 tax laws—from understanding the 4% FOB levy to complying with excise duty requirements and managing the policy uncertainty.
Whether you need help understanding the new laws, classifying your goods correctly, claiming available exemptions, preparing and filing returns, or managing risks associated with customs audits, we are here to support you.
📞 Call us: (+234) 802 320 0801, (+234) 807 576 5799
📧 Email: info@qeeva.com
📍 Visit us: 5, Ishola Bello Close, Off Iyalla Street, Alausa, Ikeja, Lagos, Nigeria
Contact us today to schedule a consultation. Let us help you navigate Nigeria’s new customs and excise regime with confidence.
Your journey to customs and excise compliance starts with a conversation. Let’s talk.
Reference Links / Sources
Nigeria Customs Service Act 2023 – Official NCS Website
Nigeria Tax Administration Act 2025 – NALTF
Nigeria Revenue Service (Establishment) Act 2025 – NALTF
Joint Revenue Board of Nigeria (Establishment) Act 2025 – NALTF
Federal Ministry of Finance – Tax Reform Guidelines
Customs suspends 4% FOB charge implementation – NCBN
Manufacturers cry out as Senate bill seeks 1,200% hike in SSB excise duty – Vanguard
OPS: FG’s 4% FOB Levy Bleeding Manufacturing Sector – New Telegraph
Harmonisation: Nigeria needs unified, evidence-based excise policy – Guardian
Customs to replace multiple import levies with unified 4% FOB charge – Nairametrics
Nigeria Customs 4% FOB Levy, VIN valuation sparks outrage – Nairametrics
SSB tax threatens 33% manufacturing output, 1.5m jobs — MAN – Vanguard
Stop import suspension levy, Reps order Customs – ITPC Lagos
Customs urges lawmakers to review import waivers – Newswatch
