Customs Suspends 4% Import Charge Following Stakeholder Concern
By Patience Ikpeme
The Nigeria Customs Service (NCS) has announced the suspension of the recently introduced 4% Free-on-Board (FOB) value charge on imports.
This decision comes after consultations with the Minister of Finance and Coordinating Minister of the Economy, Mr. Olawale Edun, and other stakeholders, following criticism from the maritime sector.
The 4% FOB charge is provided for in Section 18(1)(a) of the Nigeria Customs Service Act (NCSA) 2023. Its implementation had drawn considerable criticism from various stakeholders within the maritime industry.
The Customs Service had previously indicated that it was in discussions with the Finance Minister regarding the charge, with the outcome of those discussions determining the next course of action.
According to a statement issued by Abdullahi Maiwada, Assistant Comptroller of Customs and National Public Relations Officer, on behalf of the Comptroller-General of Customs, the suspension will allow for broader engagement and consultations with all relevant stakeholders regarding the Act’s implementation framework.
The timing of the suspension coincides with the expiration of the contract agreement with service providers, including Webb Fontaine, which were previously funded through the 1% Comprehensive Import Supervision Scheme (CISS). The Customs Service views this as an opportunity to conduct a holistic review of its revenue framework.
The statement explained that the previous funding arrangement, repealed by the NCSA 2023, which separated the 1% CISS and the 7% cost of collection, created operational inefficiencies and funding gaps that hindered customs modernization efforts. The new Act aims to address these challenges by consolidating “not less than 4% of the Free-on-Board value of imports,” ensuring a more sustainable funding model for critical customs operations and modernization initiatives.
The transition period will allow the Customs Service to optimize the management of these frameworks to better serve stakeholders and the nation’s interests. The NCS emphasized that it is already implementing several digital solutions, including the recently deployed B’Odogwu clearance system, which is delivering benefits to stakeholders through faster clearance times and improved transparency.
The Customs Service highlighted other innovative solutions authorized by the NCSA 2023, including 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 NCS reiterated its commitment to implementing the provisions of the NCSA 2023 in a way that best serves stakeholders while fulfilling its revenue generation and trade facilitation mandate. The statement concluded by promising to communicate a revised implementation timeline following the conclusion of stakeholder consultations. This suggests that while the current 4% FOB charge is suspended, some form of levy to fund customs modernization is still likely to be implemented in the future, albeit after further discussion and refinement.
