The Nigeria Customs Service (NCS) 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.
According to the Service’s National Public Relations Officer, Abdullahi Maiwada, the suspension of the charge was sequel to ongoing consultations with the Minister of Finance and Coordinating Minister of the Economy, Mr Olawale Edun and other stakeholders.
It would be recalled that the Service had, last week, announced the implementation of the 4% charge, describing the development as essential in driving its effective operation, and giving assurances to trading members of the public that “extensive consultation was ongoing with the Federal Ministry of Finance to address all agitations raised by our esteemed stakeholders”.
Maiwada stated that the suspension would enable comprehensive stakeholder engagement and consultations regarding the Act’s implementation framework, noting that, “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Under the previous funding arrangement repealed by the NCSA 2023, separating the 1% CISS and 7% cost of collection created operational inefficiencies and funding gaps in customs modernisation efforts.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”, Maiwada stated.
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.
He said that 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)).
Maiwada expressed optimism that 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 revised implementation timeline following the conclusion of stakeholder consultations”, Maiwada concluded.
