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Nigeria Customs Suspends 4% FOB Charge on Imports

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The Nigeria Customs Service (NCS) has announced the suspension of the 4% charge on the free-on-board (FOB) value of imports.

The NCS spokesman, Abdullahi Maiwada, disclosed this in a statement issued on Tuesday in Abuja.

According to him, the FOB charge essential to drive the effective operation of the service is calculated based on the value of imported goods, including the cost of goods and transportation expenses incurred up to the port of loading.

The NCS on February 5 announced that it was implementing a 4 per cent charge on the FOB value of imports.

Maiwada said that the move was in line with the provisions of Section 18(1) of the Nigeria Customs Service Act (NCSA) 2023.

The announcement has received criticism from experts and stakeholders in the sector, who said the move would worsen the country’s inflation rate.

Dr Chinyere Almona, Director-General of the Lagos Chamber of Commerce and Industry, said the implementation was abrupt and lacked due consultation with stakeholders, as required by the provisions of the NCSA 2023.

The spokesman said the suspension was a sequel to ongoing consultations by Mr Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, with stakeholders.

He said the revised implementation timeline would be announced following the conclusion of the consultation.

He explained that the suspension period would allow the service to further engage with stakeholders while ensuring proper alignment with the Act’s provisions for the sustainable funding of its modernisation initiatives.

“This suspension will 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 per cent Comprehensive Import Supervision Scheme (CISS).

“This presents an opportunity to review our revenue framework holistically,” he said.

Maiwada explained that the previous funding arrangement, which was repealed by the NCSA 2023, separated the 1 per cent CISS and the 7 per cent cost of collection.

He noted that this created operational inefficiencies and funding gaps in customs modernisation efforts.

According to him, the new Act addresses the challenges by consolidating no less than 4 per cent of the free-on-board (FOB) value of imports to ensure sustainable funding for critical customs operations and modernisation initiatives.

He said the transition period would allow the service to optimise the management of these frameworks to better serve its stakeholders and the nation’s interests.

“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,” he said.

He disclosed that NCS was already implementing several digital solutions, including the recently deployed B’Odogwu clearance system, which aims to automate trade operations and align the service with international standards.

He noted that stakeholders were already benefiting from the system through faster clearance times and improved transparency.

He stated that 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)).

He maintained that the NCS remains committed to implementing the provisions of the Act in a manner that best serves stakeholders while fulfilling its revenue generation and trade facilitation mandate.

 

 

 

NAN

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