The Nigeria Customs Service (NCS) has announced the suspension of the 4 percent Free-on-Board (FOB) charge on the value of imports.
This decision resulted from ongoing consultations with the Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, and other stakeholders. In a press statement, NCS National Public Relations Officer, Assistant Comptroller of Customs Abdullahi Maiwada, stated, “The Nigeria Customs Service (NCS) hereby announces the suspension of the implementation of the 4% Free-on-Board value on imports as provided in Section 18(1)(a) of the Nigeria Customs Service Act (NCSA) 2023. This suspension follows consultations with the Minister of Finance and other stakeholders.”
The NCS explained that this suspension will allow for comprehensive engagement and discussions with stakeholders regarding the implementation framework of the Act. Additionally, the timing of this suspension coincides with the conclusion of contracts with service providers, including Webb Fontaine, which were previously funded through the 1% Comprehensive Import Supervision Scheme (CISS). This presents an opportunity to review the revenue framework as a whole. According to the statement, the previous funding arrangement, which separated the 1% CISS from the 7% cost of collection, resulted in operational inefficiencies and funding gaps in 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” to ensure sustainable funding for essential customs operations and modernization initiatives.
The statement reads in part: “This transition period will allow the Service to optimize the management of these frameworks to better serve our stakeholders and the interests of the nation. The Act further empowers the Service to modernize its operations through various technological innovations. Specifically, Section 28 of the NCSA 2023 authorizes the development and maintenance of electronic systems for information exchange between the Service, other government agencies, and traders. “The Service is already implementing several digital solutions, including the recently launched B’Odogwu clearance system, which benefits stakeholders by providing faster clearance times and improved transparency.
Other innovative solutions authorized by the Act include the 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 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 modernization initiatives. “The NCS is 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.”
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