Most importers ask us the same question after they get their first surprise bill from the port.
“Why is the duty so much more than I expected?”
The short answer:
They planned around the tariff rate. They forgot everything the tariff rate is applied to — and everything that gets stacked on top of it.
Here is how customs duty and VAT are actually calculated on cargo coming into Nigeria.
The base: CIF
Duty is not charged on the invoice price. It is charged on CIF — Cost, Insurance, Freight.
Cost.
The invoice price the supplier billed you.
Freight.
What the carrier — the shipping line, the airline, the trucker — charged to move the cargo to the Nigerian port.
Insurance.
Not a figure you guess. In practice it is worked out from the other two: cost plus freight, uplifted by 10%, multiplied by the insurer’s rate — usually somewhere between 0.25% and 0.45%.
Once the insurance is known, everything is converted to naira at the customs exchange rate on the day, and every charge below is computed in naira.
The charges, in the order they are built
Import duty — the tariff rate for your HS code, applied to CIF. Nigeria’s tariff runs in five bands: 0%, 5%, 10%, 20% and 35%. Some items also carry an Import Adjustment Tax under the Federal Government’s fiscal policy measures.
Then the other taxes that sit alongside the duty:
Surcharge — 7% of the duty.
CISS (Comprehensive Import Supervision Scheme) — 1% of the cost of the goods. Not CIF.
ETLS — 0.5% of CIF.
VAT — 7.5%, and this is the one people get wrong. It is not charged on CIF alone. It is charged on CIF plus the duty plus all the other taxes above.
A worked example
Goods: $10,000.
Freight: $1,000.
Insurance at 0.45%: ($10,000 + $1,000) × 110% × 0.45% = $54.45.
CIF: $11,054.45.
Tariff rate: 10%.
Duty: $1,105.45.
Surcharge: $77.38.
CISS: $100.00.
ETLS: $55.27.
VAT: ($11,054.45 + $1,105.45 + $77.38 + $100.00 + $55.27) × 7.5% = $929.44.
Total payable to Customs: $2,267.54 — close to 23% of what you paid the supplier, on a product in the 10% band.
Customs works all of this in naira, so multiply through by the exchange rate on the day you clear.
Vehicles are their own case
Cars follow the same build, with a few differences.
No CISS is charged on vehicles.
The NAC levy applies on CIF. From 1 July 2026 it was cut to 10% on new vehicles (from 20%) and 5% on used (from 15%).
From 1 July 2026, a Green Tax surcharge applies by engine size — 2% for 2,000cc to 3,999cc, 4% for 4,000cc and above. Electric vehicles, mass-transit buses and locally manufactured vehicles are exempt, and Customs assesses it separately from the other charges.
Rates move — so check them on the day
Nigeria’s import charges have changed several times in the last two years. A 4% FOB charge was introduced in 2025, briefly collected, then suspended by the Federal Government in September 2025. Vehicle charges were revised in 2026.
Always confirm the current rates with your customs broker on the day of clearance.
The mistake most people make
They quote a supplier price, add the freight quote, and call that their cost.
Then duty lands on CIF, the surcharge lands on the duty, the other taxes land beside it, and VAT lands on all of it together.
By the time the cargo clears, they have often paid a fifth more than they budgeted — and in the 35% band, over half again.
The problem was never the tariff rate. It was everything the rate sits inside.
Before you commit to a shipment
A few questions worth answering first…
What is my HS code — really?
Which band does it fall in?
Have I budgeted on CIF, or only on the invoice?
Have I allowed for VAT on the full stack, not just the goods?
What exchange rate will Customs actually use on the day I clear?
If you want the number before you buy
Send us the invoice, the HS code if you have one, the origin port, and the estimated freight. We calculate your landed cost including all duties, VAT and other taxes, and tell you what to expect at the port before you pay the supplier.
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