The current administration of President Bola Tinubu in Nigeria is a government that listens to the outcry of its citizenry. This is akin to the outburst of the stakeholders and Nigerians on the imposition of a 4% levy on Free On Board (FOB) goods.
This levy was initially imposed by the Nigeria Customs Service on all imported goods. Stakeholders and experts had argued that the levy would place a strain on trade and the economy, thereby worsening inflation, increasing the cost of goods and weakening Nigeria’s trade competitiveness.
Being a government that has people-oriented policies and programmes, it resorted to retracting its step by the withdrawal of the economic policy drive.
This, in effect, led to the Nigerian Minister of Finance and Co-coordinating Minister of the Economy, Mr Wale Edun, instructing the Nigeria Customs Service to immediately suspend the levy following wide outcry and widespread concerns from importers, trade experts, and other industry stakeholders about the likely negative impact the duty might have on the economy.
Consequently, the minister decided to suspend the implementation to create room for further engagements with all relevant stakeholders and review the framework as well as examine the long-term impact on the economy.
The 4% Free on Board charge introduced by the Nigeria Customs Service last August as a unified levy is intended to replace multiple import-related fees, including the 7% cost of collection and 1% processing fee under the Comprehensive Import Supervision Scheme.
The levy, which is also designed to enhance transparency and boost revenue collection, is calculated based on the value of imported goods, including transportation costs up to the port of loading.
The grievance against the suspended levy is that it is collected along with the old rather than replacing them as intended, thus increasing the financial burden on Nigerians.
The suspension comes at a better time when the government is making all frantic efforts to balance its revenue generation with economic growth.
In addition, the suspension will give all stakeholders and relevant parties the opportunity to develop a more equitable and efficient revenue structure, one that supports government income without undermining trade and stability.
Although importers have welcomed the decision as a relief in a challenging economic environment, industry experts cautioned that the government must ensure that any future revenue measures are carefully calibrated to avoid disruption in trade and investment flows.
Stakeholders and authorities must use this review period to align with the Nigeria Customs policies with broader economic reforms aimed at stabilising the Naira, reducing inflation and improving Nigeria’s ease of doing business ranking.
The Nigeria Customs Service, on its part, must strictly comply with the minister’s directive, while the Ministry of Finance engages stakeholders to develop a more balanced, effective and robust revenue collection system.