Customs exempts manufacturers, airlines, government projects from 4% FOB charge

The Nigeria Customs Service (NCS) has granted concession to manufacturers, exempting them from paying the controversial 4 percent Free-on-Board (FOB) charge on the importation of raw materials, spare parts, and machinery.

Also exempted from the levy are commercial aircraft spare parts, goods imported for humanitatian purpose and government projects with import duty exemptions certificate.

Comptroller General of Customs, Adewale Adeniyi, announced the decision following a strategic engagement and joint press briefing with the Manufacturers Association of Nigeria (MAN) in Lagos on Friday.

The approval, he stated, came after consultations with the Minister of Finance and Coordinating Minister of the Economy, Wale Edun as part of a strategic effort to boost industrial growth and support the manufacturing sector.

He said, “Following consultatons with the Honourable Minister of Finance and the Coordinating Minister of the Ecoromy, approval has been granted for strategic exemptions from the 4% FOB charges on the following, among others:

“Importation of raw materials, spares, and machines by the manufacturers who are beneficiaries of concessions contained in Chapters 98 anc 99 of the Customs Tariff, Manufacturers who are currently on chapters 98 anc 99 are advised to apply for pre-release of the consignment to avoid payment of demurrage.

ii. Members of MAN who import raw materials, machirles, and spares that are not currently on chapters 98 and 99 to be onboarded in orde- to enjoy the exemptions provided in 5(i) above.

iii. MAN, NCS, and the Federal Ministry of Finance will together for the inclusion of manufacturers that are currently not on chapters 98 end 99.

iv.An immediate tripartite consultation of the Federal Ministry of Finance, NCS, and MAN would be held immediately to work out the modalities for expedited onboarding of manufacturers on chapters 98 and 99.

To ensure no manufacturer is disadvantaged, Adeniyi stated that 4% FOB payments already made by manufacturers who are yet to be onboarded to Chapters 98 and 99 will be held as credit and can be utilized for future customs-related transactions after their onboarding is complete.

Other beneficiaries of the special exemption include Goods imported for Humanitarian, Life Saving and other related purposes as well as
beneficiaries of the Presidential Initiative for unlocking healthcare value chain and commercial airlines’ spare parts.

“The NCS, MAN, and the Federal Ministry of Finance have committed to an immediate tripartite consultation to develop a roadmap for the expedited onboarding of manufacturers not currently listed on Chapters 98 and 99.

Beyond the tax breaks, the meeting also emphasized broader trade facilitation initiatives by the NCS to support manufacturing operations by developing one-stop shop frameworks to streamline regulatory processes and reducing unnecessary checkpoints that increase costs.

Adeniyi also outlined initiatives aimed at providing real-time clearance capabilities and automated risk assessment systems that reduce compliance costs for legitimate operators.

MAN, led by its President, Francis Meshioye, commended the initiative, noting that the gesture provides concrete evidence of the Customs Service’s commitment to supporting critical sectors while maintaining appropriate revenue collection.

Both organizations agreed to establish formal consultation mechanisms to ensure regular dialogue on policy developments affecting manufacturing operations, including proactive engagement on customs policy changes before irnplementation, feedback systems allowing real-time assessment of policy impacts, and periodic review meetings to assess progress and identify new collaboration opportunities.

“The engagement emphasized economic impact considerations, with both organizations committed to supporting Nigeria’s economic diversification objectives through job creation, export promotion, foreign exchange conservation through import substitution, and development of industrial clusters suppotecl by predictable customs environments.

“Technology partnerships were also identified as critical enablers.
Moving forward, the Nigeria Customs Service comrrlits to maintaining ongoing consultation with manufacturing sector stakeholders, continuing development of trade facilitation infrastructure supporting industrial growth, implernerting technology solutions that reduce compliance costs, and providing regular briefirgs on policy developments.

“The Manufacturers Association of Nigeria commits to constructive engagement in policy dialogue processes, providing sector-specific expertise to inform customs policy development, supporting member compliance with reguliätions, and collaborating in developing industry best practices, ” the joint communique jointly issued and signed by the Customs CG and MAN President reads.