By Nkechi Eze
The Nigeria Customs Service has announced the suspension of the implementation of 4% Free-on-Board (FOB) value on imports as provided in Section 18(1)(a) of the Nigeria Customs Service (NCSA) 2023.
This is sequel to ongoing consultations with the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr Olawale Edun and other Stakeholders.
Recall that the Nigeria Customs Service had earlier announced plans to introduce a 4% charge on Freight on Board (FOB), sparking concerns among importers, exporters, and other stakeholders in the maritime industry. The proposed charge, which was set to take effect recently, aimed to increase revenue generation for the government. However, opposition from various quarters, citing potential negative impacts on trade and the economy, led to widespread calls for a review or suspension of the policy.
According to a statement signed and made available to newsmen by the National Public Relations Officer Assistant Comptroller of Customs, Abdullahi Maiwada, “the suspension will enable comprehensive stakeholders 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 Under the previous funding arrangement repealed by the NCSA 2023, separating the 1% CISS and 7% cost of collection created operational inefficiencies and funding gaps in customs modernization efforts.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 modernization initiatives.
This transition period will allow the Service to optimize the management of these frameworks to serve our stakeholders and the nation’s interests better.
He further stated that “The Act further empowers the Service to modernize its operations through various technological innovations. Specifically, Section 28 of the NCSA 2023., authorizes 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 authorized 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 modernization 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 revised implementation
timeline following the conclusion of stakeholder consultations” he said.
