Freight Rate Increases as Shipping Companies Adjust Rates

Abiola Seun

From 1st of February, 2020, all shipping charges that warrant Value Added Tax (VAT) at the Nigerian ports will henceforth be based on the new Federal Government policy of 7.5 per cent and no longer 5 per cent.

In an advisory note to its client base, leading French shipping line, CMA-CGM, on Friday, stated that it will be complying with the new Federal Government directive as stipulated in the 2019 Finance Bill Law.

According to the notice which was sighted by newsmen “Following the signing of the 2019 Finance Bill into law on the 13th of January 2020, the Ministry of Finance has announced the 1st of February 2020 as the commencement date for the application of the value-added tax of 7.5%.

“On this note, please be advised that all charges warranting a VAT charge will be revised from 5% to 7.5% for full compliance with this directive.

“Should you have any questions, please do not hesitate to contact us on.”

Confirming this, a Clearing agent Jide Banjoko stated that all the shipping lines have been sending out shipping advisory to their customers on the change in the VAT rate.

In his words,

“Yes, we have been receiving emails from most of the shipping lines on the new VAT rate as it affects shipping charges.

“It is expected since the government had already announced it earlier in the New Year,”

Mr Banjoko stated.

It would be recalled that the Nigerian government had approved an increase in the VAT rate from 5% to 7.5% to expand fiscal revenue in the country.