In this article i reviewed how and where to apply for export incentives from the federal government of Nigeria. This is an unusual article about 2,800 words long! Which means, it could seem pretty long at first sight, but I beg your indulgence, kindly exercise patience to go through it all gradually? Please don’t scheme, every single word are in their rightful place, nothing is out of place, if it weren’t so I wouldn’t be giving you this information. It was written specially for you, in case you’re in a hurry right now and can’t read it all at once? Here’s what you can do; send it to your email, bookmark it, print it out, copy and save in MS word, do whatever you like, but just make sure you read it.
In the process
of encouraging manufacturers; the Nigerian Government has in placed several incentives that
are geared at encouraging indigenous manufacturers and a way of promoting exportations.
They are:
(1) Manufacturers Exports In Bond Scheme
(2) Export Expansion Grant Scheme
(2) Export Expansion Grant Scheme
(3) Bonafide
Manufacturers /Assemblers
(4) Free Trade Zones /Export Processing Zones
& Oil and Gas free Zones
Manufacture in bond scheme :
Definition
This scheme is
designed to encourage manufacturers to import duty free raw material inputs and
other
intermediate products whether prohibited or not for the production of goods for
export, backed
by a Bond issued
by any recognized Commercial Bank, Merchant Bank, Insurance Company or
Nigerian
Export-Import Bank. The bond will be discharged after evidence of
exportation and repatriation
of foreign proceed has been produced.
Manufacture in bond scheme: Guidelines
i. The
Manufacturer In Bond Scheme shall
be applicable to export manufacturers only.
ii. Interested
manufacturers shall apply to the Federal Ministry of Finance using the
prescribed forms.
iii. For a
manufacturer to enjoy the scheme, the factory premises must be approved for
that purpose by the
Nigeria Customs Service.
iv. Approval
including the Import Requirement Certificate should be obtained within a period of two
months and transmitted to the Nigeria Customs Service for implementation.
v. The Nigeria
Customs Service will determine acceptable guarantee Bond issued by Commercial or
Merchant Banks or Manufacturers Exports In Bond Scheme or Insurance Companies covering not less than
110 per cent
customs duty payable on each consignment.
vi. Under this
scheme, manufacturers of export commodities will be entitled to import
duty-free raw material
inputs. CKD and intermediate inputs whether prohibited or not for the manufacturer or
export goods.
vii. The
Manufacturer-in-Bond Scheme shall operate on annual 12 calendar months
importation basis as the
exporter wishes. For prohibited items however, the scheme shall operate on Import-by-Import
basis.
viii. The Bond,
which shall be effective from the date of its issuance by the Bank, shall be discharged when
the conditions stipulated therein have been fulfilled.
ix. The Nigeria
Customs Service will periodically monitor the utilization of raw materials imported under
this scheme until the Bond is fully executed.
x. In the event
of inability to any manufacturer to fulfill the conditions stipulated in the
Bond,the manufacturer
should apply to the Nigeria Customs Service through the approved guarantor, for
an extension of the Bond particularly when the life of the Bond has expired.
The extension of
the Bond shall not exceed three months.
xi. Repatriation
of the foreign exchange realized from the transaction shall be confirmed by the Central Bank of
Nigeria before the Bond is discharged.
xii. Single Good
Declaration Form Form C.2010 marked “Manufacturer-in-Bond Scheme”shall be used
for the clearance of goods under the scheme.
xiii. A
committee comprising of the representatives of the Ministry of Finance, Nigeria
Customs Service,
Nigerian Export Promotion Council, Standards Organization of Nigeria and the Central Bank of
Nigeria shall monitor the scheme. The monitoring body shall render a quarterly Report
to the Manufacturers Exports In Bond Scheme Committee.
xiv. In the
event of default by the Manufacturer, the Nigeria Customs Service shall redeem
the Bond by calling
on the guarantor to pay up the appropriate customs duties and other associated
charges.
xv. In the case
of liquidation the Company may be allowed to sell the goods in the local market with the
approval of the Honourable Minister of Finance on condition that the
appropriate customs duty and
other associated charges shall be paid.
xvi. A
manufacturer participating in the Manufacturer-in-Bond Scheme is expected to
designate a warehouse or
store in his factory premises for the storage of inputs and finished goods
xvii. Clean
Report of Inspection Form `M’ and other relevant documents for this
scheme shall be clearly
marked “MIB Scheme”.
Guidelines for Redesigned Export
Expansion Grant Scheme
Preamble:The Export
Expansion Grant Scheme is a very vital incentive required for the stimulation
of export
oriented
activities that will lead to significant growth of the non-oil export sector.
The Federal Government is
committed in its efforts to bring about tremendous growth in non-oil exports,resolved to
enhance efficiency, transparency and accountability in the administration of
the key incentive for
non-oil export development. The "Export Expansion Grant is a
policy tool to further this objective
the use of incentives supports the NEEDS and objective of mainstreaming businesses that
are currently operating in the informal sector. It is also in line with the
NEEDS requirements
that companies desiring to receive benefits from the government will have to
comply with the laws of
the country. The government in reviewing the scheme sets out the following guidelines:
Guidelines:
1. Incentive Rate: The Scheme would
operate the "Weighted Eligibility Criteria" in assessing applications
for Export Expansion Grant. The
baseline data as
supplied by individual applicant-company would be used it its assessment. Thus
the method of
assessment is 'company specific'. A company's Export Expansion Grant assessment would be conducted
once yearly and the
determined rate will apply throughout the year The Weighted
Eligibility Criteria has four bands: 30%, 20%, 10% and 5%. The following
template will be used in
assessing the incentive rate for every Export Expansion Grant applicant
Eligibility Criteria Company Data
Threshold Weight Company Score.
Local value
added 25%
Local content
20%
Employment
(Nigerians) 20%
Priority sector
10%
Export growth
20%
Capital
Investment growth 5%
Weight 100%
A new entrant
into the EEG Scheme shall provide prior period financial statement or where
applicable an
investment plan for its assessment.
2. Eligibility:
i. Exporter must
be registered with the Nigeria Export Promotion Council
ii. Eligible
exporter shall be a manufacturer producer or merchant of products of Nigeria
origin for the export
market (i.e. the products must be made in Nigeria)
iii. An exporter
must have a minimum annual export turnover of Naira 5 million and evidence of repatriation of
proceeds of exports
iv.
Exporter-company shall submit its baseline data which includes Audited
Financial Statement
and information
on operational capacity to NEPC
3. Validity for Export Expansion Grant Application:
Qualifying
export transaction must have the proceeds fully repatriated with 180 days,
calculated
from the date of
export.
4. Documentation:
All applications
for Export Expansion Grant must be completed in three copies to be
circulated to Nigeria
Export Promotion Council, Central Bank of Nigeria and Nigeria
Customs Service with the following documents:
i. Nigeria
Export Promotion Council Export
Certificate
ii. Clean
Certificate of Inspection to include quality certification
iii. Forms Nigeria Export Proceeds
duly certified by processing bank, Nigeria Customs Service and the Pre-shipment Inspection
Agents
iv. Single Goods
Declaration (SGD) Forms, duly endorsed by Nigeria Customs Service, both at front and back
v. Final
Commercial Invoice
vi. Bill of
Lading
vii. Evidence of
full repatriation of export proceeds (Center Bank of Nigeria confirmation of repatriation of
proceeds by exporter)
viii.
Certificate of Manufacture
ix. Any other
documentation as may be required by Nigeria Export Promotion Council from time to time
5. Negotiable Duty Credit Certificate
The Negotiable Duty Credit Certificate shall
be used for the payments of import duties only.
6. Company Visits:
Company visits
shall be incorporated into a programme for validation of information submitted
by the exporters
and impact assessment of the scheme. The programme will include a first visit
to validate
financial as well as operational information at least once a year and as may be
required.Impact
assessment of the scheme on the Nigeria economy shall be carried out annually
by external
consultants, as may be determined by the Honourable Minister of Finance.
7. Implementation Committee:
The
Implementation Committee will consist of:
(1) Nigeria
Export Promotion Council
(2) Federal
Ministry of Finance
(3) Nigeria
Customs Service
(4) Central Bank
of Nigeria
(5) Federal
Ministry of Commerce
(6) Federal
Ministry of Industry
(7) Special
Adviser to the President (Manufacturers and Private Sector)
The
implementation Committee shall meet monthly to consider processed applications
and make
recommendations
to the Honorable Minister of Finance for approval, and subsequent issuance of
NDCC by Nigeria Export Promotion Council.
8. Inter-Ministerial Committee:
There shall be
an inter-ministerial Committee to review the activities of EEG Scheme. The
Committee
shall meet twice
a year. Membership includes all members of the Implementation Committee and
representatives
of the Ministry of Agriculture, Trade Malpractice Committee and Economic and
Financial Crime
Commission
9. Administration of Export Expansion Grant:
The Export Expansion Grant heme
shall be domiciled in Nigeria export promotion council and administered in conjunction with the
Implementation
Committee. The list of applications to whom NDCC have been issued shall be forwarded to the
Federal Ministries of Finance and Commerce monthly.
10. Outstanding Claims:
All outstanding
claims in respect of transactions between the suspension of the scheme and its
subsequent
lifting will be processed under the old Export Proceed Grant Scheme Rate (i.e.exports made with
Bill of
lading dated on
or before 31st December, 2004).
11. Violation of Guidelines:
Any violation of
these guidelines by any claimants shall be handled by the Presidential
Committee on Trade
Malpractices and the Economic and Financial Crimes Commission in conjunction
with members of the
Implementation Committee.
12. Effective Date:
These guidelines
take effect from 1st January, 2005
NOTE:
1 EXPORT
CERTIFICATE is required on
each consignment for all categories of export whether or not
an exporter is eligible for the Export Expansion Grant. The certificate is obtainable from
NEPC offices throughout the federation.
2 FREE OF CHARGE
(upon the submission of the pre-shipment documents)Application
processing fee is hereby abolished
3 Double dipping
into government industrial incentives will not be allowed. (i.e beneficiaries of EEG are prohibited
from enjoying other industrial incentives e.g. Manufacturers Export In-Bond Scheme)
Export Processing Zones & Export
Processing Factories : Oil & Gas Free ZoneThe Free Port System A Free Port is
an enclosed area near to, or forming part of, a seaport or airport, in which
imported goods can be
stored without payment of customs duty or taxes. These are only paid if the
goods are delivered from
the Free Port for consumption in the country in which the Free Port is
situated. If the good are
exported from the free port to another country, no Customs duty or taxes are
payable. This
avoids the onerous Customs legislation covering bonded warehouses and the procedures for
claiming drawback or refunds of duty previously paid. Free Ports enable
exporters to build up buffer
stocks at the port or airport of loading, thus avoiding the need to use their
own warehousing and
the double handling involved. It is important to note at this stage, that
legislation
governing the
operation of the Free Ports specifically excludes assembly and processes of manufacture,
Permissible operations are limited to unpacking/repacking, sorting, grading,
sampling
and labeling
etc., processes which do not alter the essential nature or state of the
imported article. Establishment of the Onne Oil &
gas Free Zone The
Onne/Ikpokiri area of Rivers State was declared as an Oil & Gas Free Zone
by Decree No. 8, which was
published in Nigerian Government Gazette No. 12 of 29th March 1996.In terms of
the
Decree, Free
Port Licenses are only issued to operators in the Oil and Gas related
industries. This enables
companies operating in those industries to use the Onne Free Port as a
Distribution Centre
for their
Nigerian and West African activities.
Attractions
To encourage
potential investors to set up manufacturing operations in the Onne Free Zone,
the Nigerian
Government Decree provides the following incentives for approved
enterprises.Nigerian taxes, levies,
duties and foreign exchange regulations will not apply in the Free Zone. Repatriation
of foreign capital
investment in the Free Zone is permitted at any time with the capital
appreciation of the investment. Profits
and dividends earned by foreign investors in the Free Zone may be remitted
overseas at any
time. No import or export licenses are required. Up to 100% foreign ownership
of the business in the
Free Zone is permitted. Companies operating in the Free Zone may employ foreign management and
other qualified personnel. Free Port Licenses
Free Port
Licenses will only be granted to Companies, which operate in the Oil, and Gas
related industries and
area registered with the Department of Petroleum Resources.Two types of
license will be
issued depending on the legal status of the applicant:
Special Licenses Special licenses
are granted to companies who are legally established and incorporated outside Nigeria.
However, business can be undertaken and sales made in Nigeria through
subsidiaries,
appointed agents
or distributors. A company with a special license is also allowed to purchase
goods or services from
Nigeria.
General Licenses General licenses
are granted to company’s already holding do the Registrar of Companies in
Nigeria and a permit
issue valid Certificate of Incorporation from the Department of petroleum Resources allowing the company to
operate as an Oil and
Gas Service company. Activities similar to those allowed by the companies
existing
permit will be authorized under the
General license.
Export Processing Zones & Export Processing
Factories : Negotiable Duty Credit Certificates
The Negotiable Duty Credit Certificates are an alternative to
cash payment of export incentive claim under the
Manufacturer-In-Bond Scheme and can be used to settle import duty
payment due to Government by the
beneficiary of the Certificate. The Certificate is jointly issued and signed by the Nigeria Export
Promotion Council and the Federal Ministry of Finance on behalf of the
New Manufacturer-In-Bond Scheme
Committee in respect of the incentive claims relating to Duty Drawback (DDS), Export Expansion Grant
(EEG) and the Export Development Fund (EDF) Schemes.
Procedure
i. Any holder or beneficiary of the
Certificate can use it for his benefit or negotiate it with other
interested parties on mutually
agreed terms.
ii. Where import duty is with Negotiable Duty Credit Certificates designated
banks are required to issue separate receipts
with indication “for Negotiable Duty Credit Certificates PAYMENT”
stated therein to distinguish it from import duty
receipts issued for Bank
Cheque/Drafts.
iii. The collecting bank shall
forward the duplicate (Pink Cover) of the Certificate with a copy of
the receipt and pay-in-slip to the
Nigeria Customs Service as per method of the Cash backed payments while the triplicate
(white copy) will be forwarded to the office of the Accountant General of the
Federation.
iv. A copy of the receipt shall be
issued by the Processing bank to the holder or beneficiary of
the Certificate
v. The collecting bank shall,
thereafter, submit the original duly batched to the Assistant Director, Trade & Exchange
Department Central Bank of Nigeria when making weekly returns and retain a photocopy for
its records. Such returns shall be made on the Monday
following the reporting week. For
the avoidance doubt separate returns shall be rendered for cash backed and Negotiable Duty Credit Certificates Import Duty
Payments.
Transferability
All authorized dealers are to note
that as a negotiable instrument the certificate is transferable by
special endorsement to the
transferee as mutually agreed between both parties. However a certificate is subject to three (3)
transfers, with each transfer counter endorsed by an authorized signatory of the Nigeria Export
Promotion Council.The designated banks are required
to play the role of Intermediation to facilitate the operation of the
Scheme.
Utilized Balance
In case of partial utilization, the
collecting bank shall indicate the unutilized balance on the face of all
copies of the certificate as well
as on a photocopy of the original, which shall be handed over to the
holder. Upon presentation to Nigeria Export
Promotion Council,
the holder shall be issued with the outstanding value using
specific denomination(s) for the
unutilized balance.
Commission
A maximum of 50k (fifty kobo) per
=N=1,000.00 (one thousand naira) only shall be payable by the
beneficiary or holder of the
certificate to the designated bank as administration charge on the
utilized value of the certificate.
For Further Information, please
contact:
The Assistant Comptroller-General (Excise &
Industrial Incentives)
NIGERIA CUSTOMS SERVICE HEADQUARTERS,
ABIDJAN STREET, P.M.B. 26, ZONE 3, WUSE, ABUJA.
TEL/FAX: +234809 523 4694
Export Processing Zones & Export Processing
Factories : Pre-Shipment Agents
The Chief Liaison Officer
COTECNA INSPECTION LIMITED
4TH Floor, Marble House,
1 kingsway Road,
Ikoyi, Lagos Nigeria
Tel.: 2692648, 2692649, 2695340
Fax.: 2690985
Telex: 28643 Cotins-ng
The Manager Operations.,
GOBAL SCAN The Contract Manager
S.G.S. SOCIETE GENERALE DE
SURVEILLANCE, S. A
GLOBAL TRADE SOLUTIONS
Liaison Office Intercontinental
Plaza
999 C Danmole Street, 4th Floor
M.B. 800048, Lagos Nigeria
Tel.: 611188, 610792, 2625347-50
Fax.: 2623042
E-Mail: nglagoslo@2sgsgroup.com
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