Isaac Samuel
The House of Representatives Committee on Customs and Excise has issued a seven-day ultimatum to the Nigeria Customs Service (NCS) to stop the collection of the one per cent Comprehensive Import Supervision Scheme (CISS) levy and the seven per cent cost of collection, declaring both as illegal and unknown to any extant law in the country.
Chairman of the Committee, Leke Abejide (ADC, Kogi) who gave the directive yesterday when the management of the service appeared before the committee to defend its 2025 budget proposal said the only legal collection for the funding of the service is the four per cent Free-on-Board levy.
Abejide however decried the poor level of funding of the service in 2024 by the government despite surpassing its revenue target.
The Lawmaker said the committee will allow the service to collect the one per cent CISS and seven per cent cost of collection till June 30, adding from the July, 1, they will not be permitted to collect the level as it was not known to any law in the country.
Although the Deputy Comptroller General in Charge of Finance, Bello Mohammed Jibo who represented the Comptroller General told the Committee that the implementation of the four per cent FOB was suspended to allow the service sensitise stakeholders, Abejide threatened that the House will be forced to take legal action against the service if the collection which he called illegal continues.
He also threatened that the House will take legal action against the service if they failed to do what the Customs Management Act says they should do.
Abejide said the poor performance of the 2024 budget of the service has led to the level of performance on Personnel cost to stand at 43.53 per cent overhead cost at 46.34 per cent and capital project performance at 45.68 per cent despite the service surpassing the target of 2024.
The Customs was given a revenue target of N5.079 Trillion, but eventually generated and accounted for N6.105 Trillion representing an increase of N1.026 Trillion or 20.21 per cent in 2024.
He questioned why the service could not fund its operations in 2024, adding that “another shocking revelation is that from January to December in 2024, the 60 per cent of the one per cent Comprehensive Import Suspension Scheme (CISS) which was part of the revenue source to fund your overhead, personnel cost and capital projects recorded zero revenue to your cover.
“It is in the opinion of this committee that you should tell us what went wrong because the purpose of creating one per cent CISS was to take care of service providers back then such as COTECNA, SGS, and GLOBAL SCAN who were responsible for valuation and the issuance of Risk Assessment Report (RAR) and maintain scanning operations.
“Also, payment is equally made to Web Fountaine Limited that provided network and automation to NCS. But about 80 per cent of these operations and work schedules have been taken over by Nigeria Customs Service. Therefore, why are you not getting your share of 60 per cent of the one per cent CISS?
“However, this committee is not unaware that CISS is not backed by any law in Nigeria. It is not in the Laws of the Federation of Nigeria and even your seven per cent cost of collection is equally illegal as it is not in LFN. The only legal source of income back by the Act of Parliament as signed by the President of the Federal Republic of Nigeria into Law and is Gazetted in LFN is the four per cent Free-On Board (FOB) which can be found in section 18(1A) of Nigeria Customs Service Act, 2023 (Federal Republic of Nigeria official Gazette No. 105 Lagos -9th June, 2023 Vol.110).
DCG Jibo said the Nigeria Customs Service was established to take charge of collection of Customs and Excise revenue and account for such in a manner as may be directed, suppressing smuggling activities, arrest and prosecution of offenders and carrying out trade facilitation.
He said despite the attendant high revenue grants to duty exemptions, waivers, and concessions, the continuous drop in cargo throughput due to economic stiffness, the effect of currency floatation that results in unfavourable trade volume and the expected revenue inflow and the de-excise of many excisable commodities, leaving only a few; cigarettes, beer, and alcoholic beverages, the service was able to record some remarkable achievement in 2024.
He also said aside government policy measure that exempted payments of Customs Duties and import VAT on some essential food commodities in 2024 and delay in rollout and implementation of the 2023 fiscal policies, the service would have performed better than it did during the year.
Jibo said the management of the Nigeria Customs Service is considerably determined to ensure that the 2025 to 2027 Fiscal strategy plan scales through successfully, adding that to achieve the set targets.
To achieve this, he said, there was the need for the Customs modernisation project, with the introduction of the newly launched Unified Customs Information System, provides a platform for full automation of all Customs procedures, which is expected to enhance revenue collection efficiency.
He said further that the Service’s Management is intensifying its efforts to achieve more effective revenue recovery interventions, stressing that with the collaboration of WCO in developing an operational manual for PCA, there will be a better approach to revenue recoveries through the PCA, Systems Audit and Valuation.
He maintained that the Nigeria Customs Service has implemented the Authorized Economic Operator (AEO) and Advanced Rulings programme, and consequently developed and built same into its operations which will boost the trade facilitation drive, enhance the release time of goods, improve the turnover time of Import and Export, and increase revenue generation as well.
He disclosed that to tackle the menace of revenue leakages through smuggling, stakeholder engagements remain a striking agenda of the management of the Nigeria Customs Service.
He called for the introduction of more scanners across Customs formations and the adoption of surveillance equipment will aid better revenue generation in 2025 and going forward, saying with accelerated clearance and timely release of goods, the floating exchange will remain favourable to trade.
He recommended other measures such as the re-introduction of excise on telecom services and single-used plastics policies as well as review of the tax expenditure policy of the Government to ensure a reasonable application that may. not impose maximum negative impact or pressure on revenue.
He also said that the Service anti-smuggling campaign, using all required operational guides as provided within the confines of Customs laws, will be intensified to ensure that illicit trade that creates a sphere for revenue leakages, as well as economic sabotage, is brought to the barest minimum.
