Tariffs are taxes levied by one country on goods and services imported from another.Tariffs are imposed by governments to generate revenue, protect domestic industries, or gain political leverage over another country.
According to the World Trade Organization (WTO), a tariff is a term used to describe customs duties on imported goods. Tariffs give locally produced goods a price advantage over similar imported goods, and they raise revenue for governments.
Nigeria uses a combination of tariffs and quotas to tax international trade in order to generate revenue while also protecting domestic industries from highly competitive imports. Thus, the ECOWAS 2015 – 2019 Common External Tariff governs Nigeria's tariffs (CET). The tariff is divided into five bands: zero duty on capital goods and essential drugs, 5% duty on raw materials, 10% duty on intermediate goods, 20% duty on finished goods, and 35% duty on strategic sector imports.
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