Section 18(1)(a) of the Nigeria Customs Service Act 2023 stipulates that the Nigeria Customs Service (NCS) would not be implementing the 4% Free-on-Board (FOB) value on imports.
In response to public outcry over the 4% import tax, which stakeholders claim will further raise Nigeria’s inflation rate, the suspension was implemented.
According to Customs, the policy is currently being discussed with other stakeholders, including Mr. Olawale Edun, the Coordinating Minister of the Economy and the Minister of Finance.
NCS said in a statement on Tuesday that the suspension will allow for extensive stakeholder engagements and participation on the Act’s implementation framework.
The NCSA 2023 eliminated the previous funding model, which separated the 1% CISS and 7% cost of collection. This led to operational inefficiencies and funding gaps in the attempts to modernize Customs.
By combining “not less than 4% of the Free-on-Board value of imports,” the new Act tackles those issues and guarantees long-term financing for vital customs operations and modernization projects.
According to Maiwada, the transition time will enable the Service to effectively manage the frameworks for the benefit of stakeholders and the interests of the country.
The Act also gives the Customs Service the authority to use a variety of technical advancements to modernize its operations.
In particular, the NCSA 2023’s Section 28 permits the creation and upkeep of electronic networks for information sharing among dealers, the service, and other governmental organizations.
Stakeholders are benefiting from the Service’s implementation of a number of digital solutions, such as the recently implemented B’Odogwu clearing system, which speeds up clearance times and increases transparency.
The Act also authorizes non-intrusive inspection equipment (Section 59), risk management systems (Section 32), single window implementation (Section 33), and electronic data exchange facilities (Section 33(3)).