Customs 4% FoB Levy Lacks Presidential Notification To National Assembly, SEREC Insists
By Sulaimon Salau
The Sea Empowerment and Research Center (SEREC) has insisted that the newly introduced 4% Free on Board (FoB) levy lacks the necessary requirements to its implementation.
The Head of Research, SEREC, Eugene Nweke in a reaction to the Nigeria Customs Service (NCS) statement, said the implementation of the levy fails to go through the requisite provisions of the section 18 of the customs act 2023, as it lacks presidential notifications to the National Assembly nor presidential approval or consent.
Nweke commended the Customs management for its prompt reaction to the matter, but insisted that it is “yet to meet with the appropriate standard application or undergo through administrative due process nor in line with the international best practices”.
He stated: “I must begin with appreciating the management reactionary and response time to critical trade concerns as raised by stakeholders.
“Indeed, it is an indication that the service is on top of its legitimate functions, being responsive and has a listening ear 24/7,” he stated.
Nweke continued: “At this juncture, my last take on this particular circular is that, it is yet to met with the appropriate standard application or undergo through administrative due process nor in line with the international best practices, and reasons for saying so being that, this circular could not be rated in all standard as having judiciously gone through the requisite provisions of the section 18 of the customs act 2023. In particular, no presidential notifications to the National Assembly nor presidential approval or consent could be referenced to in this regard, except if such process will be back dated and reference overnight.
“Let me state here without prejudice, other than, directing the area comptrollers to kick start stakeholders engagement, it is most administratively appropriate to firstly, suspend the collections of the fee, go back to drawing board and issues an implementation grace period for the collection of the 4% FCS fee across board.
“This to me squares up with due process and international best practices, thus, advancing the culture of responsible partnership between the Service and the Stakeholders, especially the trading public and the forwarders.
“This is so because, a serious unequal trade treatment has been committed, based on operational findings, while the implementation of the 4% fee has been integrated into the Apapa and Tincan command revenue assessment portals, it is same with the PTML command portal.
This development, thus causing trade distrusts, distortions and disruptions in financial budgettings of the shippers, as it casts a heavy competition burden amongst the trading public who clears their shipments from Customs ports to sell in a common market, one paying the 4% fees and the other not paying.
“Finally, with regards to the right and left customs 7C’s and 7C’s, I wish to urge the management to revisit it and attend to this trade policy concern with prompt sense of administrative diligence, as foreign investors and global stakeholders are watching with keen interest,” he stated.
It would be recalled that the Comptroller General of Customs Bashir Adewale Adeniyi has ordered all Customs Area Controllers (CAC) to sensitize importers and stakeholders about the recently introduced 4 percent Free On Board (FoB) levy.
The Customs boss in a circular NCS/FATS/ABJ/S.797, signed by Deputy Comptroller-General Finance, Admin and Technical Services, B.M Jibo, said the 4% Free on Board (FOB) levy is aimed at enhancing revenue generation and ensuring compliance with the NCS Act 2023.
The circular titled, ‘Sensitization Of Importers And Stakeholders On The Collection Of 4% FOB,’ said the 4% Free on Board (FOB) levy is aimed at enhancing revenue generation and ensuring compliance with the NCS Act 2023.
Highlights Of The Key Points In The Provisions Of Part V, Section 18 Of The Customs Act 2023
1.The Nigeria Customs Service (NCS) shall maintain bank accounts approved by the government, into which shall be paid:
– Not less than 4% of the free-on-board (FOB) value of imports (subsection 1(a)).
– Revenues from assessment and collection of cost-based user fees (subsection 1(b)).
– Annual or supplementary budgetary provisions made by the government (subsection 1(c)).
– Grants, aids, or donations from local or international development partners (subsection 1(d)).
2.The President may propose an increase to the 4% FOB value of imports to the National Assembly, subject to cogent and verifiable factors from the NCS (subsection 2).
3 Any proposal for an increase shall be determined by the Board, subject to approval by the President (subsection 3).
4 The user fee referred to in subsection 1(b) shall be determined by the Board and approved by the government (subsection 4).
5.The tariff regime for duty and excise computations shall be determined by the Board and published in the tariff handbook and website, subject to approval by the National Assembly (subsection 5).
6.Notwithstanding any other law or enactment, the NCS shall be empowered to promote stability and continuity in revenue generation, trade facilitation, and economic development, subject to the provisions of this Act (subsection 6).
