Uneasy Calm At Seaports Over New 4% FoB Levy On Imported Goods
. Customs Consults Ministry Of Finance, May Review Import Fees
. Directs Controllers To Sensitise, Agents, Importers
By Sulaimon Salau
The sudden introduction of a new 4% charge on the Free On-Board (FOB) value of imports by the Nigerian Customs Service (NCS) has continued to worry the clearing agents, importers and other stakeholders in the industry.
The agents accepted that the newly introduced fee was legitimate and in line with the Nigeria Customs Service Act (NCSA) 2023, but expressed concerns that the implementation was too sudden, as the stakeholders were not sensitized about the new development.
Besides, they argued that NCS should not sustain the collection of 1% Comprehensive Import Supervision Scheme (CISS) fee (a regulatory charge imposed for funding Nigeria’s Destination Inspection Scheme) alongside the 4% FOB charge.
In a swift response, the NCS has immediately begun sensitisation of the stakeholders urging them to support the legally binding initiative, adding that the “measures introduced in alignment with the NCSA 2023 reflects a balanced approach born out of extensive consultations with industry players, importers, and regulatory bodies”.
In another memo sighted by Slye News, the Comptroller General of Customs, Bashir Adewale Adeniyi, has directed all Customs Area Controllers to immediately begin sensitisation of importers and stakeholders about the recently introduced 4% FoB levy.
The Head of Research, SEREC, Eugene Nweke, agreed that the newly introduced levy was in the Part Five, Section 18 of the Customs Act 2023, but said the imposition of a 4% charge on CIF value without proper notification and circular may create uncertainty and confusion among importers and customs brokers.
He added that: “The implementation of the 4% charge without the required presidential write-up to the lawmakers and official pronouncement may be considered unilateral and not in line with the provisions of the custom law.
Nweke added that the imposition of a 4% charge on CIF value may increase the overall cost of imports, which may be passed on to consumers.
He stated that, “it amounts to business unfriendly for the NCS to implement 4% FCS fee alongside the extant 1% CISS collection.
“This is because the FCS charge is meant to finance customs operations and cargo inspection is a component of its operations.
“Therefore, collecting the 4% FCS charged on FOB for financing customs operation and at this same time collecting 1% CISS (Comprehensive Inspection Service Scheme) charged on FOB for cargo inspection handling operation fee tantamounts to high handedness, in the context of the NCS and industry procedural code”, he stated.
Nweke said “the situation on the ground is critical, as many cargo are trapped across customs ports due to the uncertainty and confusion surrounding the 4% charge. The customs authorities should take immediate action to address this situation”
NCS in a statement made available to Slye News and signed by the Assistant Comptroller of Customs and National Public Relations Officer, Abdullahi Maiwada, said: “The Nigeria Customs Service (NCS) proudly recognises the invaluable contributions of stakeholders in shaping and actualising the Nigeria Customs Service Act (NCSA) 2023.
“This landmark legislation, which replaces the long-standing Customs and Excise Management Act (CEMA) and other related laws is a product of extensive consultations, constructive dialogue, and collaborative efforts with key industry players, government agencies, and other stakeholders.
“Their insights, expertise, and unwavering commitment have been instrumental in ensuring a robust legal framework that enhances efficiency, promotes innovation and strengthens transparency in customs operations.
“In line with the provisions of Section 18 (1) of NCSA 2023, the NCS is implementing a 4% charge on the Free On-Board (FOB) value of imports. The FOB charge, which is calculated based on the value of imported goods, including cost of goods and transportation expenses incurred up to the port of loading, is essential to driving the effective operation of the service.
“Furthermore, the NCS acknowledges concerns raised by stakeholders over the sustained collection of 1% Comprehensive Import Supervision Scheme (CISS) fee (a regulatory charge imposed for funding Nigeria’s Destination Inspection Scheme) alongside the 4% FOB charge.
“As a responsive and responsible government agency, the service wishes to assure the general public that extensive consultation is ongoing with the Federal Ministry of Finance to address all agitations raised by our esteemed stakeholders.
“Under the leadership of the Comptroller General of Customs, Bashir Adewale Adeniyi, the NCS reaffirms its commitment to transparency, fair trade practices, and efficient revenue management,” he stated.
Meanwhile, 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.
“In line with the implementation of the 4% Free on Board (FOB) levy, it is imperative that all Customs Area Controllers take proactive steps to engage and educate importers, clearing agents, and relevant stakeholders on the modalities for its collection.
“The 4% Free on Board (FOB) levy is aimed at enhancing revenue generation and ensuring compliance with the NCS Act 2023. As such, all Area Commands are directed to organize stakeholder meetings, workshops, and sensitization sessions to provide clarity on the purpose, process, and compliance requirements of the 4% FOB collection.
“Your cooperation in this regard is essential for the successful implementation of this directive. Kindly ensure strict compliance and provide periodic updates on the level of stakeholder engagement and compliance rates. Treat as urgent, please.” he stated.
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).
