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Customs

Freight forwarders grieve over N12 trillion Customs revenue target for 2025.

— lament target projection will kill trade facilitation, encourage smuggling, run agents out of business 

Funso OLOJO 
An air of melancholy has enveloped a cross section of freight forwarders who are plying their trade at the Lagos ports over the N12 trillion revenue target imposed on the Nigeria customs service by the National Assembly.
It could be recalled that recently, while presenting the 2024 performance of the agency, the Comptroller-General of Customs, Adewale Adeniyi, had announced an impressive revenue haul  of N6.105 trillion by the service in 2024, surpassing that year’s target of N5 .079 trillion by 20 percent.
Consequent on this, the service set N6.5 trillion as revenue target for 2025.
However, the  National Assembly Joint committee  on Customs thought differently.
Led by its Chairmen, Senator Sani Musa and James Faleke, the committee believed that the revenue projection of N6.5 trillion was conservative and encouraged the Customs to aim higher by generating a whooping sum of N12 trillion in 2025.
However, a cross section of freight forwarders who spoke to our reporter were alarmed by the humongous revenue target which they believed was not only unrealistic under the present sluggish Nigerian economy but said the target was a recipe for disaster.
In their unanimous opinions, the 12 trillion imposed on the customs by the National Assembly Joint committee will kill trade facilitation, run customs brokers out of business,scare away  importers  from Nigerian ports and create irresistible incentives for smuggling.
Alhaji Mukaila Abdullaziz, the former Secretary General of the Association of Nigerian Licensed Customs Agents(ANLCA) decried the new revenue target which he believed was an ” open cheque for Customs to kill trade facilitation and go for maximum revenue” believing that smuggling will thrive as a lot of importers will be pressured by customs into resulting to the illicit trade.
” As a stakeholder, I do know that the issue of revenue and trade facilitation is the decision of each country. Each country determines what it really wants.
” It is very obvious that Nigerian government has shown that trade facilitation is not part of its programme.
” By fixing high revenue target, the government has clearly given a blanket cheque to Customs to kill trade facilitation and go for maximum revenue collection even when global trade stipulates that you don’t resort to the rule of the thumb to determine value of foods”
Alhaji Baba Usman, the Managing Director of Lungu Nigeria Limited and
a Customs broker who plies his trade in Tin Can Island Port believed the high revenue target is a way to send many freight forwarders out of business.
“What they did is a way to send everyone of us(freight forwarders) out of the market( business) because the rate of importation is very low, so where will customs get that kind of money?
” The duty they( customs) are imposing on the importers and their agents is too much.
” How can a 40 footer container be paying between 18 million to 10 million?
” They don’t even know what they are doing because they don’t want importers to import again and they don’t want agents to do their job.
“Again, as far as I am concerned, it is also the fault of the Customs because they will go to the Presidency and National Assembly and brag that they can collect so much revenue and this will automatically put pressure on the importers” the freight forwarder lamented.
Alhaji Usman however advised importers to mobilize themselves through their association and go to the National Assembly and the Ministry of Finance to complain about this high revenue target and let them realize how it will adversely affect import trade.
Otunba Olasupo Komolafe, another frontline freight forwarder and the Managing Director of Alkos Star Nigeria Limited also based in Tin Can Island Port, believed that Customs has the capacity to meet the N12 trillion revenue target only if the customs exchange rate comes down.
” But with the present Customs duty exchange rate of about N1, 541 or thereabout to a dollar, where will Customs get that amount of revenue from?
Otunba Komolafe noted that the high exchange rate has depressed the import business as fewer cargos are now coming in .
” But if the Central Bank of Nigeria( CBN) brings down the rate to, say, N1,000 to a dollar, I assure you that Customs will meet that target because importers will bring in high volume of cargo.
” But presently, because of the high exchange rate, an importer who used to bring in 10 containers has now reduced the numbers to three” the freight forwarder claimed.
Dr Segun Musa, the Vice President of the National Association of Government Approved Freight Forwarders( NAGAFF) believed that the high revenue target set by the National Assembly for the Customs was a sad reflection of the poor perception of Nigerian leaders about the Nigerian economy.
He noted that developed economies do not lay much emphasis on revenue from imports to fix their economy more than internally generated revenue, saying high revenue from imports is a sign of sinking economy.
” The target is ridiculous. It is the developing economies that use such target as a barometer to measure revenue.
“No advanced economy will think of import duty target.It is ridiculous.
” Giving such ridiculous revenue target is an indication that government is lazy and cannot think outside the box by creating economy that could be sustained with internally generated revenue.
” By  implication, they are going to further kill the economy because it means the economy is based on importation which does not encourage production,
manufacturing.
” By giving customs this high revenue target, the government is asking the Customs to frustrate exportation and create more opportunities for revenue from importation.
” There is no economy desirous of growth that still depends on import duty.
“Any economy that wants to grow depends on internally- generated revenue through production, manufacturing.
” In a civilized country, if government declares high revenue from import duty, the citizens will burst into tears because that suggests that the economy has nose- dived.
“By realizing N6 .5 trillion by customs in 2024,  it suggested that our economy has nose- dived.
” Now they want to generate N12 trillion, that means they want to kill the economy.
” It shows those who are managing our economy lacks the requisite knowledge.
” It is also obvious that people in the National Assembly don’t know what they are doing.
” They are there looking for free money to finance the economy.
” Who told them that internally -generated revenue cannot finance our budget if they are able to build capacity”
Dr Musa alleged that 40 percent of Customs revenue are collected illegally just to meet its target.
” If I want to be proved wrong, let us post- audit what the Customs has so far collected.
” Most of the value of the goods from where this revenue are being collected are value based on window – shopping prices.
The NAGAFF Chieftain alleged that Customs will just go on Internet and get window prices and fix it on all the commodity just to jack up their revenue which is illegal.
” It is criminal to use Internet value to declare revenue for government”, he alleged.
“Am just wondering if this revenue target is sustainable when the economy has nosed dive and our naira heavily devalued, where would importers get money to import and without high level of importation, where will the customs generate the revenue target” the NAGAFF Chieftain queried.
” The only way which customs can come close to meeting the target is through penalties because I know they are going to clamp various frivolous penalties on importers and their agents which I believe is unreasonable” he concluded.
Dr Boniface Aniebonam, the Founder of NAGAFF, was more concerned with transparency of customs in the value they give the goods than the 12 trillion revenue target.
” It is not about Customs having capacity to generate that volume of revenue but the issue is to what extent can people transacting business with customs could be compliant with import and export regulations?
” There is no magic about customs procedures. Under destination inspection, you are expected to make a genuine declaration for customs purposes.
” In that regard,the customs has the mandate to check your declaration and confirm whether it is appropriate or not.
” If it is ok, they will allow you to go , if not, they would address it.
” I think the only problem we are having with customs as a matter of fact is the issue of transparency.
“What I mean is that these values by Customs, which are subjective, must be make public so that the trading public will know.
“For instance, as regards vehicles, the problem has died down there because the valuation has make it known to importers and their agents what to pay.
” As regards the revenue target given to customs, I want you to know that government needs a lot of money to meet up their mandate in terms of infrastructural development.
” Even when there seems to be argument between the importers and the customs on the real amount to pay on a cargo, the customs has a procedure that will not delay the cargo while the argument goes on.
” This is by the process whereby the customs asks you to enter into a  bank bond while the argument continues and the cargo will be asked to go.
” For me, am not bothered about the issue of revenue target, it is a budgetary matter.
” It is a working tool by which government drives the economy.
” But what we should be concerned about, as I said earlier, is to what extent will the importer and his agent be compliant with customs regulations.
” People should also know that Customs cannot facilitate illegitimate trade if the owner of the goods is not compliant with customs regulations” Aniebonam said.
He stated that Customs has the mandate to facilitate trade and there is a consequence for impeding trade but said government will not get the revenue due for it if people don’t come forward with their cargo.
He reiterated his stand that nobody should bother himself with the issue of revenue target as customs is doing its best to encourage trade.
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Customs

Customs buckles as it suspends implementation of 4 per cent FOB charge

Funso OLOJO 
In a manner demonstrative of a listening administration,the management of the Nigeria Customs service has suspended the implementation of the controversial 4 per cent Free on Board(FOB) charge on imports.
The suspension followed the outcry that greeted the implementation of the novel charge which importers and their agents said was jumped on them by the customs without notice nor consultation.
To allow enough time for stakeholders’ consultation and sensitization, the Customs said the suspension was sequel to the ongoing discussion with the Minister of Finance, Mr Adewale Edun.
In a press statement by the Customs management , the service disclosed that the timing of the 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).
” The Nigeria Customs Service (NCS) hereby announces 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.
“This suspension will enable comprehensive stakeholder engagement and consultations regarding the Act’s implementation framework.
“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 revised implementation timeline following the conclusion of stakeholder consultations” the service promised.
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Customs

We feel your pains — Customs seeks support of stakeholders over introduction of 4 percent levy on customs operations

Funso OLOJO
Nigeria Customs service has explained the rationale behind the introduction of the 4 percent  levy on the value of imported goods which has now become a subject of controversy among the freight forwarders.
The levy, which is the 4 percent Free on Board (FOB) of imported goods, was introduced into the assessment notice of a cargo declarant.
This has caused an outrage among stakeholders, especially the freight forwarders who have vowed to resist it.
However, in its official reaction to the new fee, the Customs management sought the understanding of the agitated stakeholders, acknowledging their importance relevance and invaluable contributions to the emergence of the new Customs Act.
Explaining the rationale behind the new fee, the Customs said this was in line with the provisions of the Customs Act of 2023.
“The Nigeria Customs Service (NCS) proudly recognises the invaluable
contributions of stakeholders in shaping and actualising the Nigeria Customs Service Act (NCSA) 2023.
“This landmark legislation, which replaces the long-standing
Customs and Excise Management Act (CEMA) and other related laws is a product of extensive consultations, constructive dialogue, and collaborative efforts with key industry players, government agencies, and other stakeholders.
“Their insights, expertise, and unwavering commitment have been instrumental in ensuring a robust legal framework that enhances efficiency, promotes innovation and strengthens transparency in customs operations.
“In line with the provisions of Section 18 (1) of NCSA 2023, the NCS is
implementing a 4% charge on the Free On-Board (FOB) value of imports.
“The FOB charge, which is calculated based on the value of imported goods, including cost of goods and transportation expenses incurred up to the port of loading, is essential to driving the effective operation of the Service”
The customs also acknowledged the  concerns raised by stakeholders over the
sustained collection of 1 pet cent Comprehensive Import Supervision Scheme (CISS) fee (a regulatory charge imposed for funding Nigeria’s Destination Inspection
Scheme) alongside the 4% FOB charge.
“As a responsive and responsible government agency, the Service wishes to assure the general public that extensive consultation is ongoing with the Federal Ministry of Finance to address all agitations raised by our esteemed stakeholders” the service pledged
 “Under the leadership of the Comptroller General of Customs, Bashir Adewale
Adeniyi, the NCS reaffirms its commitment to transparency, fair
trade practices, and efficient revenue management.
“All stakeholders are urged to
support this legally binding initiative, as the measures introduced in alignment with the NCSA 2023 reflects a balanced approach born out of extensive consultations with industry players, importers, and regulatory bodies, the service concluded.
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Customs

ANLCA divided over increment in CISS fee

Funso OLOJO 

There seems to be a discordant tune from the umbrella body of the freight forwarders in Nigeria, the Association of Nigerian Licensed Customs Agents(ANLCA) over the increment of the Comprehensive Import Supervision Scheme(CISS).
It would be recalled that the Customs brokers woke up on Tuesday, February 4th, 2025 to discover that the CISS fee, which used to be 1 per cent of the value of Import has been jerked up to 4 per cent.
The increment,which they claimed was slammed on them without a prior notice, has therefore sparked off heightened tension among the agitated freight forwarders who were said to be calling for a showdown with the customs.
While some of them were hinting at possible shut down of the Port to give vent to their anger and frustration, the National President of ANLCA, Mr Emenike Nwokeoji, has backed the decision of the Customs to increase the CISS fee.
Apparently scolding those who are allegedly “spoiling for war” with the Customs for their lack of knowledge of Customs law, Emenike said the Customs acted within the 2024 Customs Act to make the increment.
“I am not aware that ANLCA is protesting over the increment of the CISS from one per cent to four per cent.
“What I am aware of is that the ANLCA NECOM is meeting to take a decision on the increment.

“I, however, know that the increment is backed by the Nigeria Customs Service Act 2023. The increment is in the Act. That is where they brought it from” Emenike declared.

He however expressed his disappointment over the manner the customs jumped the increment on Customs brokers.
“They( Customs )should have, however, held sensitisation meetings to ensure all stakeholders are well aware.

“The increment started today. NECOM will be meeting very soon to take a stance on the new development.”, the ANLCA high Chief stated.

His stance on the issue contradicted the position of Alhaji Mukaila Abdullaziz, the former Sole Administrator of ANLCA who believed the increment by the customs may spark off an outrage among freight forwarders.
Also, Segun Oduntan, the Vice President of ANLCA holds contrary view with his principal, Mr Emenike when he allegedly issued 24 – hour ultimatum to the Customs to reverse the increase or get prepared to contend with the wrath of the irate customs brokers.
“We noticed the NCS has introduced 4% and renamed it Customs Operation Finance as appeared on this assessment.
“The Customs CG needs to call for an emergency meeting within 48 hours to address this development because it is already causing uproar in the freight forwarding system.

“All the freight forwarding associations would have to come together on this matter” Oduntan thundered .

Kayode Farinto, the former Acting National President of ANLCA however advised freight forwarders not to pay the increased tariff, asking the Customs authority to give the Customs brokers 90- day window through which the trading public will be adequately sensitized about the new fee
Meanwhile, the customs authority has said it would respond to the development as soon as possible in order to douse the gathering tension.
The CISS is a regulatory fee charged by Customs on all imported goods into Nigeria.
The fee, which used to be 1 per cent of the FOB (Free on Board) value of the shipment, has now been adjusted to 4 per cent, according to Section 18 of the Nigeria Customs Service Act 2023.
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