The Nigeria Customs Service (NCS) has suspended the implementation of the 4% Free-on-Board (FOB) charge on imports, as outlined in Section 18(1)(a) of the Nigeria Customs Service Act (NCSA) 2023. This decision follows ongoing consultations with the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Olawale Edun, and other key stakeholders.
The suspension allows for a more comprehensive engagement with stakeholders on the framework for implementing the Act. It also aligns with the conclusion of contract agreements with service providers, including Webb Fontaine, which were previously funded through the 1% Comprehensive Import Supervision Scheme (CISS). This development provides an opportunity for the Service to reassess its revenue framework and address funding gaps.
Under the previous funding arrangement, the separation of the 1% CISS and 7% cost of collection led to inefficiencies in customs operations and modernization efforts. The NCSA 2023 seeks to resolve these issues by consolidating a charge of “not less than 4% of the Free-on-Board value of imports” to ensure sustainable funding for critical customs operations and modernization initiatives. The suspension period will enable the Service to optimize the management of these financial frameworks for improved efficiency.
Additionally, the Act grants the NCS the authority to modernize its operations using advanced technology. Section 28 of the NCSA 2023 allows for the development of electronic systems to facilitate information exchange between Customs, government agencies, and traders. The NCS has already introduced digital solutions such as the B’Odogwu clearance system, which has enhanced clearance efficiency and transparency. Other modernization initiatives covered under the Act include the Single Window system (Section 33), Risk Management Systems (Section 32), Non-Intrusive Inspection Equipment (Section 59), and Electronic Data Exchange Facilities (Section 33(3)).
The NCS remains committed to ensuring a smooth implementation of the Act while balancing its mandate of revenue generation and trade facilitation. A revised implementation timeline for the 4% FOB charge will be announced following the conclusion of stakeholder consultations.