The Nigeria Customs Service (NCS) on Tuesday announced suspension of the controversial 4% Free-on-Board (FOB) charge on imports as provided in Section 18(1)(a) of the Nigeria Customs Service (NCSA) 2023.
The Service said the decision was sequel to ongoing consultations with the Minister of Finance and Coordinating Minister of the Economy, Mr Olawale Edun and other stakeholders.
Importers and other port stakeholders had criticised the new charge, which they said was outrageous and could lead to increase in prices of goods and heighten inflation.
In a statement by Customs National Public Relations Officer, Abdullahi Maiwada, the trade facilitating service indicated that the suspension of the implementation of 4% charge on imports would enable comprehensive stakeholder 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),” Maiwada stated.
“This presents an opportunity to review our revenue framework holistically,” he added.
The Customs said under the previous funding arrangement repealed by the NCSA 2023, separating the 1% CISS and 7% cost of collection created operational ininefficiencies and funding gaps in customs modernisation efforts.
According to the service, 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 noted.
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)).
