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Customs, CBN clash over e- valuation, e-invoice policy

The Nigeria Customs Service (NCS) and the Central Bank of Nigeria (CBN) have expressed divergent views over the introduction of e-valuation, e-invoice policy for import and export introduced by the apex bank.

Both agencies of government expressed contrary opinions over trade policy last week when their representatives  appeared before the House of Representatives Committees on Customs and Excise, as well as Banking and Currency to address issues arising from the introduction of the new system by the CBN

The CBN explained that the new policy would block leakages and generate more revenue for the government.

The Customs Service, however, countered their claim on grounds that it was in violation of the existing law, insisting it did not follow due process and would hinder trade as well.

In their submission, the Manufacturers Association of Nigeria (MAN) said the apex bank was too hasty in implementing the policy without inputs from relevant stakeholders.

The CBN had issued a circular that the new system would kick off on February 1, 2022, but the House had on January 27, 2022, suspended it and directed the apex bank to adopt a 90-day timeline for the implementation of fiscal measures to avoid destabilising effects on the economy.

Director, Trade and Exchange, Dr. Ozoemena Nnaji, who represented the CBN, said the new system was seamless and integrated with the import and export process in a manner that does not hamper any of the stakeholders.

“This would be one way of ensuring what we should earn in trade comes to us without loss of foreign and duties.

” The main aim is to ensure that we allocate our scarce foreign exchange resources to imports and we collect the export duties and transaction values due to us at valued market rates,” she stated.

She also revealed that an analysis of trade invoicing in Nigeria in 2014, shows that the potential loss of revenue to the government was approximately 2.2 billion for the year.

This amount, she says, represents four percent of total annual government revenue (as reported by the IMF), and fifteen percent (approximately) of the country’s total trade.

On his part, the Assistant Comptroller-General of the Customs Service, Galadima Saidu, said the new CBN policy was in violation of the World Trade Organisation’s Facilitation Agreement (WTO TFA) of which Nigeria is a signatory.

“The introduction of the CBN initiative is against Article 7 of General Agreement on tariff and trade 1994 and Article 1, 2 and 6 of the WTO TFA. The agreement aims for a fair, uniform, and neutral system for the valuation of goods for Customs purpose and it conforms to commercial realities and which outlaws the use of arbitrary or fictitious customs values.

Nigeria is a signatory to the WTO trade facilitation agreement. The agreement is legally binding with punitive measures that would adversely affect the Nigerian economy.”

He added that WTO agreement emphasises the need for a timeframe for the publication of any additional fees or charges, hence the CBN’s circular introducing the policy dated 21st January 2022, with an effective date of 1st February 2022 violated this.

He further pointed out that the use of bench-marking in valuation would negate the aim of the agreement on Customs valuation and would result in delays and uncertainties.

“The use of bench-marking in valuation would negate the aim of our agreement on Customs valuation and would result in delays and uncertainties. The use of benchmarking in valuation was abolished due to the dynamic nature of pricing, especially in this current time when technology is rapidly evolving,” he said.

Saidu claimed that the Customs Service was only informed through newspaper publications about the introduction of the policy and effective date of the CBN initiative, as there was no consultation done prior to the release to the public.

He also said the window which is just 10 days apart, is too short and would disrupt the trade supply chain and revenue collection

“The introduction of additional fees and or charges and procedures though the e-evaluating and e-invoicing would definitely set back Nigerian traders and adversely affect Nigerian economy which has struggled to recover from two recessions in the past five years.

It would not be in the best interest of CBN, NCS, or the Nigerian Government to proceed with any initiative that would hinder Nigerian traders from being able to compete in these trying times,” he said.

Earlier, the representative of MAN, Folurunsho Adeyemi, said there is a need to ensure the CBN doesn’t go ahead with implementing the policy without accommodating constructive inputs of stakeholders, especially those whose businesses would be negatively impacted.

This, he said, is necessary to ensure the government does not create a regime of chaos that would decelerate the already low level of activity in the economy.

The Joint Committee Chairman, Leke Abejide (ADC, Kogi), in his ruling directed the CBN and Customs Service to harmonise their differing opinions on the import/export electronic invoice policy and report back on March 17, 2022, for further action.

He also said the policy remains suspended until they report back and conclude on the matter.

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Customs

Performance of Apapa Customs scanning officers excites Comptroller Jaiyeoba

The Eyewitness Reporter
The Area Controller of Apapa command of the Nigeria Customs Service, Comptroller Babajide Jaiyeoba has lauded the uncompromising attitude of the officers of the Non-Intrusive Inspection Technology Unit (NIITU) which he said has been invaluable to the overall success of the command.
Comptroller Jaiyeoba, who was on an unscheduled visit to the scanner site, reminded the officers of the importance of teamwork as a strong basis to sustain the gains of compliance and revenue collection recently recorded by the command.
He thanked Deputy Comptroller Salamatu Atuluku, the Officer in charge of the scanning site and encouraged the unit not to be deterred by complaints coming from persons who were made to pay accurate duties to the government after issuance of demand notices
According to him, no business person who is made to part with money will be happy with officers who refused to compromise the ethics of their job
” The main reason for me coming here is to appreciate you. I may not see you but I have seen your work and I won’t keep quiet about what I have seen about your work.
“You are doing very well. I just want to encourage you to work as a team. If you don’t work as a team, you give room for outsiders to come in and when they come in, they divide you and when they divide you,  achieving success will be very difficult
” Do your work without blemish. Once you keep your arm straight, you can stand before anybody. Your work as a customs officer is to ensure that you do the correct thing
” For those of you doing an intervention in the form of Demand Notice(DN), there is no body who part with money that will be happy with you.
“They will want to play intelligent by hiding somewhere. When you fetch them from their hiding place, they become your enemy. Whatever they write about anybody here will still come down to me and if anybody works well, the onus on me is to defend such a person.
“Just have it at the back of your mind that you owe yourself the duty of doing your work diligently whether anyone comes around as a friend or enemy.
“It is not enough for you to rest. The reward for hard work is more work. These demands require sacrifice so that you can maintain the status” he said.
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Customs

Apapa Customs contributes 36.3 percent of N1. 347 trillion revenue generated by the Service  in three months

Comptroller Babajide Jaiyeoba
—– as the flagship command grosses N489b in Q1
The Eyewitness Reporter
The Apapa command of the Nigeria Customs Service has continued to live up to its status as the Customs’ cash cow as it garnered the sum of N489,614,095,022.15 in the first three months of the year.
The amount, which was 100 percent higher than the N212.5b collected in the corresponding period of 2023, was 36.3 percent of the total earnings of the service in the first quarter of 2024 which stands at N1, 347,675,608,972.75.
In a press statement signed by Abubakar Usman, the Chief Superintendent of Customs and the Public Relations officer of the command, the Customs Area Controller (CAC) of the command, Comptroller Babajide Jaiyeoba, commended the officers and port stakeholders for their cooperation towards the attainment of the laudable feat and called for sustained compliance by government and private sector stakeholders.
According to the statement, Comptroller Jaiyeoba reminded them that the Apapa Command of the NCS is playing a critical role towards the realisation of the N5.7tr annual target of the NCS in 2024 and as such all hands should be on deck to achieve it.
“The almost N 2 trillion target the command is expected to collect in 2024 is attainable through diligently abiding by the service books of instructions like the Nigeria Customs Service Act (NCSA) 2023, government import/export prohibition lists, Common External Tariff and Federal Government approved Standard Operating Procedures (SOP)” the Customs chief said.
While thanking the officers for their punctuality, diligence, and non-compromise in the discharge of their responsibilities, Jaiyeoba reminded them of the CGC Bashir Adewale Adeniyi and Customs Management confidence vested in them.
The CAC reminded them that the present customs management has created room for multiple benefits for those who comply with the rules.
He stated that the recently launched AEO is one of such benefits.
Jaiyeoba described the command’s first quarter collection as a bold step towards the realisation of the target and reminded all port users about the importance of compliance, which, according to him, comes with multiple benefits.
“I want to urge all stakeholders in Apapa Port to keep supporting us in achieving an efficient system where everyone plays by the rules to achieve smoother, seamless, and faster import/export cargo clearance
“Making honest declaration puts the declarant at a vantage position to have a credible reputation and enjoy the benefits that come with earned integrity such as fast track and possible migration to the authorised economic operator(AEO)
” Such attitude of compliance saves time and money as examination officers would find the cargo less cumbersome to process and other units of the service including sister government organisations would not need to flag such cargo for seizure or arrest of the importers/exporters. The cargo gets cleared on time, and payments for penalties after demand notices are not necessary as no DN is issued on compliant import/export.
” I will continue my weekly engagement of stakeholders at various levels to sustain the tempo of our achievements and consolidate on the gains from regular enlightenment of every member of the port community.
“As we step into the second quarter to end the first half of 2024, I am convinced we will do better in revenue collection, facilitate more trade through our port and prevent smuggling under any guise,” the CAC said.
It is on record that the 2024 revenue target of the Apapa Customs put at about N2 trillion is 35.1 percent of the total revenue target of the whole service for the year put at N5. 7 trillion.
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Customs

Customs laments effects of fluctuation in exchange rates on operations, cargo volume

—praises efforts of Finance Minister to stabilise the market 
The Eyewitness Reporter
The Nigeria Customs Service has lamented the difficulties posed by the fluctuation in customs exchange rate to the clearance of consignments at the ports as well as its militating effects on cargo volume in the first quarter of the year.
Adewale Adeniyi, the Comptroller General of the Service, while giving the scorecard of the service in the last three months of the year, recounted the damage done to the confidence of the trading public as well as the repercussions of the unstable exchange rates.
According to him, the first quarter witnessed a total number of 28 rates as determined by the Central Bank of Nigeria (CBN) which governed the clearance of goods at the ports.
“Additionally, significant fluctuations in exchange rates applied in the customs clearance of consignments posed considerable difficulties.
“As per protocol, the exchange rate utilized by Customs in the clearance of goods via the Nigeria Integrated Customs Information System (NICIS) is based on the rate determined by the Central Bank of Nigeria (CBN).
“In the last quarter, a total of 28 rates were directed by the CBN, ranging from NGN 951.94 per USD 1 in January 2024 to a peak of NGN 1,662.35 per USD 1 in February 2024.
“While a singular exchange rate of NGN 951.94 per USD 1 was maintained in January, February witnessed 15 different spot rates ranging from NGN 951.94 per USD 1 to NGN 1,662.35 per USD 1.
” March saw a total of 13 different spot rates applied, ranging from NGN 1,303.84 to NGN 1,630.16. These fluctuations resulted in an average applied exchange rate of NGN 1,314.03 per USD 1 in the clearance of Customs goods during the quarter”
Adeniyi disclosed that the unstable rates, apart from disrupting the operations of the customs,  also have far-reaching consequences as they sent worrying signals to the market operators and the industry stakeholders.
“The repercussions of these fluctuating rates have sent concerning signals to our stakeholders, affecting and disrupting activities.
” Beyond the speculation regarding potential gains it may have on NCS revenue, the implications on transaction volumes are significant and outweigh any possible benefits.
“These concerns are already manifesting in current activities, with the potential for lagged effects in the coming months” the customs boss lamented.
He however praised the efforts of the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, whose support for the customs made the agency engage the CBN in periodic consultations that eventually restored sanity to the system.
“Mindful of these implications on the trading public and the overall economy, the NCS, with the support of the Honourable Minister of Finance, has initiated periodic consultations with the Central Bank of Nigeria (CBN) to mitigate the potential impact of exchange rate fluctuations on import activities.
” The relative stability in the past days can be attributed to the interventions of the Honourable Minister of Finance and the Governor of the CBN.
Adeniyi further rued the campaign of calumny launched against the service by those whom he described as malicious non-state actors to undermine the integrity of the agency.
He vowed that the service, under his leadership, is resolute in solving genuine, evidence-based complaints and observations but will not succumb to cheap blackmail.
“The NCS encountered non-operational challenges stemming from deliberate attempts by malicious actors to undermine the reputation of the Service.
” It is crucial to underscore that the NCS remains resolute in addressing genuine, evidence-based observations, as we have consistently done in the past.
” Constructive, fact-based criticisms channeled through appropriate means are always welcomed by the Service, as they keep us vigilant in fulfilling our commitment to the crucial responsibilities entrusted to us.
” Despite these challenges, we are steadfast in prioritizing transparency and accountability in all our operations, reaffirming our dedication to serving with integrity and excellence” he pledged.
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