Nigeria Customs Service Suspends 4% FOB Charge Amidst Stakeholder Engagement

In a recent development, the Nigeria Customs Service (NCS) has announced the suspension of the implementation of the 4% Free-on-Board (FOB) value on imports, as stipulated in Section 18(1)(a) of the Nigeria Customs Service Act (NCSA) 2023.

This decision comes after ongoing consultations with the Honourable Minister of Finance, Mr. Olawale Edun, and other stakeholders.

The suspension aims to facilitate comprehensive stakeholder engagement and consultations regarding the Act's implementation framework. This move aligns with the expiration of the contract agreement with service providers, including Webb Fontaine, which were previously funded through the 1% Comprehensive Import Supervision Scheme (CISS).

The previous funding arrangement, repealed by the NCSA 2023, created operational inefficiencies and funding gaps in customs modernization efforts. The new Act addresses these challenges by consolidating "not less than 4% of the Free-on-Board value of imports" to ensure sustainable funding for critical customs operations and modernization initiatives.

The Act empowers the NCS to modernize its operations through technological innovations, including:

Electronic Systems: Developing and maintaining electronic systems for information exchange between the Service, Other Government Agencies, and traders (Section 28 of the NCSA 2023).

Digital Solutions: Implementing digital solutions, such as the B'Odogwu clearance system, which stakeholders are benefiting from through faster clearance times and improved transparency.

Innovative Solutions: Authorizing innovative solutions, including Single Window implementation, Risk management systems, Non-intrusive inspection equipment, and Electronic data exchange facilities.

The suspension period will allow the NCS to further engage with stakeholders and ensure proper alignment with the Act's provisions for sustainable funding of modernization initiatives. The Service remains committed to implementing the provisions of the Act in a manner that best serves stakeholders while fulfilling its revenue generation and trade facilitation mandate.