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.