Freight Shipping between Malaysia and Nigeria | Rates – Transit times – Duties and Taxes

How to calculate duties & taxes when importing from Malaysia to Nigeria?

Understanding the calculation of customs duties and taxes can simplify your importing process from Malaysia to Nigeria. The key elements to consider include the country of origin, the HS Code, the Customs Value, the Applicable Tariff Rate, alongside other potential taxes and fees relevant to your products. Let's break that down, starting with identifying the country where your goods were manufactured or produced as this directly affects the assessed customs duties and taxes you'll need to pay.

Step 1 - Identify the Country of Origin

First off, why is identifying the country of origin so crucial?

1. It's a customs regulation: Customs authorities worldwide need to know where a product is made. So, before checking the Harmonized System (HS) code, we need to make sure we're crystal clear on the goods' origin.

2. Trade Agreements: Malaysia and Nigeria have certain trade accords that might affect your taxes. This step can flag any benefits or requirements associated with these pacts.

3. Duty Rates: Knowing the country of origin helps in figuring out the precise duty rate. It's simple math: accurate origin = precise duty rate.

4. Import Restrictions: The countries have specific goods that they allow or prohibit. You don't want a nasty surprise, like discovering your goods can't be delivered.

5. Anti-dumping and Countervailing: To protect local industries, countries may impose additional duties on certain goods from certain countries. Identifying origin can help dodge any such bullets.

Each trade agreement between Malaysia and Nigeria has its own set of rules. You might be eligible for lower or even duty-free access if your goods qualify under these agreements. So, make sure you double-check their terms and have the necessary documentary proofs.

Certain items, like used clothing, are restricted when sourcing from Malaysia. So, ensure to check the national customs regulations. This advice might seem like basic stuff, but trust us, it's pretty important! It could save you a lot of time and money down the line.

Step 2 - Find the HS Code of your product

The Harmonized System (HS) Code, also known as the Harmonized Tariff Schedule (HTS) code, is an internationally standardized system of names and numbers which classify traded products. It is used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics.

Your best bet to determine the harmonized system code of your goods is to ask your supplier. They are quite familiar with what they're importing and know the relative regulations pertaining to the assigned HS code.

If for some reason this isn't possible, you can always find the HS code by yourself using a step-by-step method.

First, access an HS lookup tool. We recommend this one: Harmonized Tariff Schedule.

Once you're on the site, just input the name of the product you're interested in into the search bar.

After performing the search, check the 'Heading/Subheading' column to find the HS code for your product.

Quick note: Accuracy is key when determining your product's HS code. Using an incorrect code can lead to delays in the shipping process and even potential fines due to incorrect duty calculations. So, make sure you're picking the correct HS code for your goods.

Finally, for a visual guide on how to read an HS code, check out the infographic we've prepared for you.

Step 3 - Calculate the Customs Value

Preparing your shipment from Malaysia to Nigeria, you may find the term 'Customs Value' a bit puzzling. It's not simply the price of your goods. It's actually the total value used by customs to calculate duties and taxes, and it's based on the CIF value - that is, the Cost of your goods, Insurance and Freight charges added together. For example, if your product is worth $1000, the shipping costs $200, and insurance is $50, your CIF value becomes $1250, which is the actual 'Customs Value' for your goods. Remember, understanding this can make a huge difference in preventing any costly surprises along your shipping journey.

Step 4 - Figure out the applicable Import Tariff

Import tariffs are charges levied on products as they enter a country. In Nigeria, there are two tariff types in operation, namely Ad Valorem Tariff, which is a percentage of the product's value, and Specific Tariff based on the product properties like weight or volume.

To figure out the relevant tariff for your goods:

1. Refer to your previously identified Harmonized System (HS) code — say for example, 1006 which stands for rice.

2. Use the Nigeria Customs Service's tariff lookup tool (link to be added by the website). Input the HS code and the country of origin, in this case, Malaysia.

After these steps, you'll find the tariff rate. Suppose it's 10%. Then, if your CIF (Cost, Insurance, and Freight) is $10,000 USD, the import duty is calculated as:

Import Duty = Import tariff % x CIF value
= 10% x $10,000
= $1,000 USD

Therefore, the payable duty when importing rice from Malaysia to Nigeria under these assumptions would be $1,000 USD. Understanding your specific tariffs is paramount to have an accurate picture of your import expenses.

Step 5 - Consider other Import Duties and Taxes

In addition to the standard tariff, goods imported into Nigeria from Malaysia might be subject to other duties. The excise duty can apply to specific goods like alcohol or tobacco. Furthermore, the anti-dumping tax might be levied on products sold cheaper in the foreign market than the domestic one - a way to protect local industries.

Take this theoretical calculation: your shipment is coffee mugs valued at $500, and you've already been assessed a standard tariff rate of 20% ($100). If, hypothetically, Nigeria implements a 10% anti-dumping tax on such imported items at that point, an additional $50 would be your responsibility.

Keep in mind; these are illustrations and actual rates approved by the Nigerian customs authority will differ.

On top of that, there is a Value Added Tax (VAT), which is commonly misunderstood. It is calculated based on the cost, insurance, and freight (CIF) value plus duty. If we continue with our coffee mug example and the VAT is 7.5%, the total value for VAT calculation would be $500 (goods) + $100 (duty) + $50 (anti-dumping tax) = $650. 7.5% of $650 equals $48.75.

These additional taxes can quickly add up, making it vital to factor them into your shipping budget.

Step 6 - Calculate the Customs Duties

In Step 6 - Calculate the Customs Duties, the customs duty for your shipment of goods from Malaysia to Nigeria is calculated based on the Customs Value, also known as the CIF (Cost, Insurance, and Freight value) of the goods. Here we lay out three common scenarios for better understanding.

Example 1: Let’s say your shipment has a CIF value of $1,000 and there's a 5% customs duty but no VAT. Your customs duty due would be $1,000 5/100 = $50.

Example 2: Now suppose VAT (5%) is also applicable. Calculate VAT on the total value of CIF and customs duty. So, it’s ($1,000 + $50)5/100 = $52.50. Therefore, customs duty + VAT = $50 + $52.50 = $102.50.

Example 3: Let's add anti-dumping taxes (10%) and Excise Duty (20%). Now, the duty and VAT computation is ($1,000 + $100 + $200)5/100 = $65. Therefore, total charges = $1,000 (CIF) + $50 (customs) + $65 (VAT) + $100 (anti-dumping) + $200 (Excise duty) = $1,415.

Customs procedures can be complex and time-consuming. With DocShipper managing your customs clearance, you can be assured of precise cargo valuation and avoidance of unnecessary costs. Contact us today for a free quote within 24 hours and allow us to navigate your business through the world of customs, anywhere in the world.

Bill of Lading

Moving goods between Malaysia and Nigeria? Your Bill of Lading is an instrumental piece. It's not just some shipping document, it's proof of ownership transfer from a shipper to a carrier, then from the carrier to the receiver. Imagine it as a relay baton, only this one's filled with paperwork! It records details about consignment, freight, pickup, and delivery. For air cargo, you've got your equivalent: the AWB. Opting for an electronic (“telex”) release? Great choice! You get to save the hassle of dealing with paper documents and speed up your whole process - no more waiting for couriers! So, remember, keep your Bill of Lading close and your shipments can flow smoother and faster.

Packing List

In your shipments from Malaysia to Nigeria, the Packing List will almost be your constant companion. Imagine you're sending a consignment of 500 designer bags. Here's where accuracy counts! The Packing List—created by you, the shipper—needs to reflect each bag succinctly. It's not just about the quantity but classifications, like color, style, weight, and even the dimensions of each item. So, don't skimp on the details!

Imagine shipping without it—delivering 500 bags through sea or air freight becomes a customs nightmarish riddle. No one knows what's being transported! That's why customs officers in both Malaysia and Nigeria insist on a detailed Packing List—it acts as their eyes to ensure everything aligns with regulations. Take it as a shipping mantra: Accuracy and detail in your Packing List can sidestep a ton of customs trouble!

Commercial Invoice

A Commercial Invoice is crucial when shipping goods from Malaysia to Nigeria. It's more than just a description of the merchandise; think of it as a passport for your goods. It needs to detail the commodity code, value of the items, country of origin, and destination. To streamline your customs clearance, ensure this information is consistent with your other shipping documents, like the Bill of Lading. An inaccurate or inconsistent Commercial Invoice can cause costly delays. For instance, if your shipment of electronic components is valued at RM20,000 on the invoice but RM25,000 on the packing list, it'll raise red flags. So, pay keen attention to the harmonization of details across your documents.