Customs Suspends 4% FOB Charge On Imports

The Nigeria Customs Service (NCS) has announced the suspension of the implementation of 4% Free-on-Board (FOB) value on imports as provided in section 18(1)(a) of the Nigeria Customs Service Act 2023.

The suspension was a response to the public outcry over the 4% charge on imported goods, a move stakeholders say would further lead to increase in Nigeria’s inflation rate.

Customs said it is now having consultations with the Minister of Finance and Coordinating Minister of the Economy, Mr Olawale Edun, and other stakeholders over the policy.

In a statement issued on Tuesday, NCS said the 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% Comprehensive Import Supervision Scheme (CISS). This presents an opportunity to review our revenue framework holistically,” Customs spokesman Abdullahi Maiwada stated.

Under the previous funding arrangement repealed by the NCSA 2023, separating the 1% CISS and 7% cost of collection created operational inefficiencies and funding gaps in Customs modernisation efforts.

The new Act addresses those challenges by consolidating “not less than 4% of the Free-on-Board value of imports,” designed to ensure sustainable funding for critical customs operations and modernisation initiatives.

Maiwada said the transition period will allow the Service to optimise the management of the frameworks to serve stakeholders and the nation’s interests better.

The Act further empowers the Customs 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.

The Service is already implementing several digital solutions, including the recently deployed B’Odogwu clearance system, which stakeholders are benefiting from through faster clearance times and improved transparency.

Other innovative solutions authoriser 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 said the suspension period will allow the service to further engage with stakeholders while ensuring proper alignment with the Act’s provisions for sustainable funding of these modernisation initiatives.

“The NCS remains committed to implementing the provisions of the Act in a manner that best serves our stakeholders while fulfilling our revenue generation and trade facilitation mandate. We will communicate the revised implementation
timeline following the conclusion of stakeholder consultations,” Customs stated.