Nigeria's duty-free airport shops, while allowing travelers to purchase eligible goods without customs duty or Value Added Tax (VAT), do not exempt retailers from all tax obligations, according to Wole Obayomi, founding principal of K-Tax & Legal. He clarified that the duty-free status applies only to qualifying goods and transactions, not the entire business.
The Nigeria Customs Act 2023 mandates that duty-free goods sold to departing travelers must be delivered directly to passengers bound for international destinations, with shops required to verify passports and boarding passes to prevent goods from entering the domestic market, said Olabisi Osinowo, a retired Customs officer. This framework ensures that tax exemptions align with the principle of goods exiting the customs territory, similar to tax-free shops for international travelers.
Despite the duty-free label, passengers often report higher prices in airport shops compared to external retailers. A traveler told BusinessDay,
The discrepancy, according to Osinowo, stems from factors like high exchange rates, premium markups for captive customers, and logistical costs associated with security screening. While duty-free shops avoid VAT on outbound sales, their profit margins remain influenced by operational constraints, underscoring that