By Kenneth Jukpor
The Federal Government has proposed a legislative framework that would stop the Nigerian Customs Service (NCS) from revenue collection, saying the role was a distraction to the service.
According to the government, the sole responsibility of collecting revenue should be domiciled with the Federal Inland Revenue Service (FIRS) while NCS facilitates trade.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, stated this at a one-day public hearing on a bill for an Act to repeal the Customs and Excise Management Act (2004) and the Nigeria Customs Service (establishment) Bill.
The session was organized by the House Committee on Customs. The sponsor of the bill and Chairman of the Committee, Leke Abejide, said the bill sought to rejig the board of customs and excise management with competent and result-oriented technocrats.
Experts, however, have described this policy statement as a serious issue that requires an extensive debate on the pros and cons of the development.
While it appears that the federal government isn’t so keen on stopping Customs from collecting revenue with the revelation last week that the government actually expects NCS to generate N4.1trillion in 2022, freight forwarders and fiscal experts have been divided on the proposal.
A finance expert who preferred anonymity said; “This development could be a good one from the federal government’s projection if it would generate more money. However, it could be punitive if we expect the FIRS to collect monies on behalf of Customs when they aren’t trained to do so.”
“Who in FIRS knows the nomenclature of Customs? There’s a lot of issues that could come out of this but we need to explore the angles and analyse the merits and demerits of this proposition. It could be a policy thrust that should be followed-up.”
Speaking with MMS Plus on this proposal, a veteran freight forwarder and Chairman of MarkMary Group of Companies, Prince Taiye Oyeniyi argued that the proposal by the Finance Minister is misguided.
According to him, NCS isn’t just a national body whose functions could be dictated by the government because it is a signatory to several global bodies, especially the World Customs Organization (WCO) and the Service has its functions clearly spelt out by the global body to include revenue collection.
His words: “NCS is a signatory to several treaties and you can’t take away the functions that are recognized globally. I think this assertion by the Finance Minister shows that she doesn’t have a clear understanding of the functions of Customs. However, it’s also important to state that NCS has to be headed by someone who has experience in the field and not a retired military officer. I’m not trying to rate his performance badly but the truth is that a professional officer who has grown in the service wouldn’t have to do trial and error”
Noting that Nigeria has invested a lot in training officers of NCS through various stages of of Customs processes from Pre-Arrival Assessment Report, the United Nations Conference on Trade and Development (UNCTAD) Automated System for Customs Data (ASYCUDA), ASYCUDA++ to the various levels of the Nigerian Customs Integrated System (NICIS I and NICIS II); he posited that it would be too costly to begin to train FIRS officers in these areas.
“Customs is the second largest revenue generating agency in the country and we have just seen that the federal government is expecting N4.1trillion from Customs this year. However, the government isn’t paying necessary attention to the maritime sector. We expect that the government makes effort to address the issues in the sector instead of pondering the removal of revenue collection from Customs.”
“It’s true that NCS has numerous flaws, but these can be traced to the management. Government shouldn’t expect the best from someone who isn’t a professional in Customs job. Col. Hammed Ali (Rtd) is doing his best, but the fact that he would have to ask questions before taking crucial decisions means that he could be misled,” Oyeniyi said.
When contacted the National President of the African Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), Mr. Frank Ogunojemite posited that Nigeria should be talking of policy review and the agency’s reformation rather than replacement.
He, however, warned that the federal government should be sensitive with target increments given to NCS because most of the revenue generation are on imported consignments despite the government’s desire to boost exports.
“We hope this overdependence on import duties wouldn’t have negative impact on the development of the country’s economy,” Ogunojemite stated.
The APFFLON boss also lamented that little emphasis is being placed on the preparation for the African Continental Free Trade Area (AfCFTA) especially on trade policies, transport sector and port processes.
“We should be discussing how to improve trade facilitation. This should be a paramount move with the federal government leading the process,” he opined.
Frank Ogunojemite, argued that instead of the proposed move, the government should review the Customs Act with a view to removing bottlenecks impeding trade facilitation.
According to him, the Service has often met and surpassed its annual revenue target thereby contributing to the nation’s economy.
It’s only few weeks ago that the Minister of Finance, Zainab Ahmed made that recommendations but it already seems like a long time ago because Customs can’t be faulted when it meets and surpasses its revenue targets.
There would be lots of trainings and retraining to enable FIRS step into the responsibility of revenue collection by Customs, but it could also be an answer to the cries of several port stakeholders and economic analysts who assert that Customs major role is trade facilitation and not revenue collection.
