Relief to manufacturers as customs scrap 4% levy on raw materials

Tuesday, September 30, 2025 - Stakeholders in the manufacturing sector have welcomed the exemption of raw materials, spare parts, and certain machinery from the payment of the four per cent Free On-Board levy by the Nigeria Customs Service (NCS).

The exception, the stakeholders argued, will help crash the prices of goods produced in the country.

The NCS had at the weekend announced significant relief measures for manufacturers and critical sectors of the economy.

The announcement was contained in a communique jointly signed by the Comptroller-General of Customs, Adewale Adeniyi, and the President of the Manufacturers Association of Nigeria (MAN), Francis Meshioye.

The agreement followed a high-level consultation between both parties in Ikeja, Lagos, on the application of the levy.

According to the communique, the approval for the exemption came after consultations with the Minister of Finance and the Coordinating Minister of the Economy.

It covers strategic imports vital to industrial production, aviation, and healthcare.

Importers of commercial airline spare parts are among those exempted from the levy.

Also exempted are importers of raw materials, machines, and spare parts listed under Chapters 98 and 99 of the Customs Tariff. Manufacturers already captured under these chapters are advised to apply for pre-release of consignments to avoid demurrage charges.

For members of MAN who import raw materials and equipment not currently listed under Chapters 98 and 99, the communique stated that steps would be taken to onboard them swiftly so they too can benefit from the exemption.

To this effect, MAN, NCS, and the Federal Ministry of Finance have agreed to work closely together to ensure the speedy inclusion of such manufacturers.

A tripartite consultation is expected to commence immediately to design the modalities for this onboarding process.

The communique also offered relief for manufacturers who have already paid the 4 per cent FOB levy but are not yet on-boarded under Chapters 98 and 99.

Such payments will now be credited to their accounts and applied to future customs-related transactions once their onboarding is completed.

It further said that the exemptions extend to government projects with Import Duty Exemption Certificates, goods imported for humanitarian or life-saving purposes, and beneficiaries of the Presidential Initiative aimed at unlocking Nigeria’s healthcare value chains.

The NCS noted that the exemptions are a demonstration of its commitment to supporting critical sectors of the Nigerian economy while sustaining its responsibility for revenue generation.

“Beyond existing exemptions, discussions focused on additional trade facilitation initiatives being implemented by the NCS to support manufacturing operations.

“These include the development of one-stop-shop frameworks to streamline regulatory processes, reduce bureaucratic bottlenecks, and systematic reduction of unnecessary checkpoints that add costs without delivering value”, the communique stated.

Other reforms include the integration of digital solutions to accelerate trade processing while safeguarding national security, and technology-driven initiatives that provide real-time clearance capabilities. Automated risk assessment systems are also being rolled out to cut compliance costs for legitimate operators.

In its response, MAN commended the NCS for introducing the Authorised Economic Operator scheme, which gives compliant traders special clearance privileges.

The association, however, urged the service to provide clear guidelines for admission into the scheme to enable more manufacturers to benefit.

Both organisations further agreed to strengthen collaboration by establishing formal consultation mechanisms. This, according to them, will ensure regular dialogue on policy developments, proactive engagement on customs changes before implementation, real-time feedback systems to assess impact, and periodic review meetings to evaluate progress and explore fresh areas of cooperation.

The outcome of the consultations represents a major step toward easing the cost of doing business for manufacturers, enhancing industrial productivity, and sustaining the growth of Nigeria’s aviation and healthcare sectors.

By exempting critical imports from the 4 per cent FOB levy and committing to further trade facilitation, the Customs Service and MAN have demonstrated a shared resolve to balance the nation’s revenue needs with the imperative of strengthening productive sectors of the economy.