Customs Buckles Under Pressure, Suspends Implementation of 4% FOB Collection on Imported Cargoes

The Nigeria Customs Service (NCS) on Tuesday announced that it has suspended
implementation of 4% Free-on-Board (FOB) value on imports as provided in Section 18(1)(a) of the Nigeria Customs Service (NCSA) 2023.

A statement issued by the National Public Relations Officer of the service, Abdullahi Maiwada, an Assistant Comptroller, stated that the suspension is sequel to ongoing
consultations with the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr Olawale Edun and other Stakeholders.

“This suspension will enable comprehensive stakeholder engagement and consultations regarding the Act’s implementation framework. The timing of this suspension aligns with the exit of the contract agreement with the Service providers, including Webb Fontaine, which were previously funded through the 1% Comprehensive Import Supervision Scheme (CISS). This presents an opportunity to review our revenue framework holistically.

“Under the previous funding arrangement repealed by the NCSA 2023,separating the 1% CISS and 7% cost of collection created operational inefficiencies and funding gaps in customs modernisation efforts. The new Act addresses these challenges by consolidating “not less than 4% of the Free-on-Board value of imports,” designed to ensure sustainable funding for critical customs operations and modernisation initiatives.

“This transition period will allow the Service to optimise the management of these frameworks to serve our stakeholders and the nation’s interests better.

“The Act further empowers the Service to modernise its operations through
various technological innovations. Specifically, Section 28 of the NCSA 2023 authorises developing and maintaining electronic systems for information exchange between the Service, Other Government Agencies, and traders.

“The Service is already implementing several digital solutions, including the recently deployed B’Odogwu clearance system, which stakeholders are benefiting from through faster clearance times and improved transparency. Other innovative solutions authorised by the Act include; Single Window implementation (Section 33), Risk management systems (Section 32), Non-intrusive inspection equipment (Section 59) and Electronic data exchange facilities (Section 33(3)).

“The suspension period will allow the Service to further engage with
stakeholders while ensuring proper alignment with the Act’s provisions for sustainable funding of these modernisation initiatives.

“The NCS remains committed to implementing the provisions of the Act in a manner that best serves our stakeholders while fulfilling our revenue generation and trade facilitation mandate. We will communicate the revisedimplementation
timeline following the conclusion of stakeholder consultations” the statement read