Foreign Trade: Custom and Excise Authority – SS1 Commerce Lesson Note (Second Term)

The Customs and Excise Authority is a government agency that assesses and collects revenue due from imports and exports. It collects import duties, export duties and excise duties, prevents smuggling, compiles trade statistics and supervises bonded warehouses. The Nigeria Export Promotion Council supports exporters with funding, information, training and publicity.

Behavioural objectives

By the end of the lesson, students should be able to:

1. explain what the Customs and Excise Authority is;
2. distinguish between import duties, export duties and excise duties;
3. state the functions of the Customs and Excise Authority;
4. explain export trade, visible and invisible exports, and entrepôt trade;
5. state the functions of the Nigeria Export Promotion Council.

What is the Customs and Excise Authority?

The Customs and Excise Authority is an agency charged with the responsibility of assessing and collecting revenue due from import and export. It is a revenue-collecting organ of the government. The department of customs and excise is under the Ministry of Finance.

What does the Customs and Excise Authority collect?

1. Import duties: These are taxes imposed on goods and services that come from other countries into a particular country. They are also known as tariffs and belong to what we call customs duties.
2. Export duties: These are taxes imposed on goods and services of a country that are sent to other countries.
3. Excise duties: These are taxes imposed on locally made goods.

What are the functions of the Customs Authority?

1. Prevention of smuggling: Smugglers are prevented from bringing or taking goods in or out of the country.
2. Collection of data on import and export: Customs authorities must compile statistics on import and export.
3. Generation of revenue: The department is also charged with the responsibility of generating revenue for the government in the form of import and export duties.
4. Collection of taxes: It collects taxes on imported, exported and locally produced goods.
5. Supervision of bonded warehouses: It monitors and supervises bonded warehouses where goods are stored until the duties are paid.
6. Checking illegal trafficking of naira: The department checks illegal trafficking of the nation’s currency.
7. Provision of information: Customs authority provides information to traders on duties to pay on the importation and exportation of goods.
8. Restriction of goods: It implements government policy on restriction of goods.

What is export trade?

Export trade is the selling of goods and services of a country abroad. Nigeria’s export products include cocoa, crude oil, rubber and cassava.

Visible and invisible exports

Export can be visible or invisible. Visible exports are tangible goods. Invisible exports are services rendered abroad.

What is entrepôt trade?

Entrepôt trade is the re-exporting of goods that have been imported from other countries. That is, goods imported into a country are later exported to other countries.

What are the functions of the Nigeria Export Promotion Council?

1. Export funding: It provides financial facilities to exporters, for example insurance and credit guarantee schemes.
2. Export development activities: It introduces measures to increase the volume and quality of goods to be exported.
3. Provision of trade information: Information is provided through the publication of trade journals and export directives.
4. Training activities: It organises seminars and workshops on export management for people engaged in international trade.
5. Publicity function: The council prepares and issues publications containing information about its activities.
6. Activities relating to export marketing: It gives information about Nigeria’s exports in the international market and how to improve their marketability.
7. Export document preparation, among other activities.

Evaluation

1. What is the Customs and Excise Authority?
2. Differentiate between import duties and excise duties.
3. State five functions of the Customs Authority.
4. What is entrepôt trade?
5. List four functions of the Nigeria Export Promotion Council.

Assignment

1. Explain the difference between visible and invisible exports, with one example of each.
2. Describe the role of a bonded warehouse in the work of the Customs Authority.