A Paradox Of High Revenue Target By Customs

By Malachi Onummadu and  Anthony David

 A Paradox Of High Revenue Target By Customs

The recent view of the Comptroller General of the Nigeria Customs Service(NCS) that the agency will do everything possible to meet up with the projected  revenue targets for the year 2022 at N2.272 trillion , N2.873 trillion for 2023 ,N3.540 for  2024,and N3.752 for 2025, has generated a lot of reactions and arguments from the major stakeholders in the  industry.

 While some believe that revenue generation could be good for the swift growth of the economy, others posit that even though revenue generation leads to economic development, the high target given by the Nigerian government to the Customs is an absurdity which could create disruption in the economy if adequate measures are not taken to address pertinent issues, as trade facilitation and the ease of doing business, which is also a policy of the Federal Government.

 Aside the revenue generation function of the Customs, there are yet other roles which should be played by the Service to ensure that all sectors of the economy thrive in order that progress could be made in terms of economic growth and development. Amongst the various roles performed by the NCS according to findings, reveal that the NCS occupies a strategic position in the international trade, in both export and import areas.

In this regard, the Customs protects the environment security wise ,against the proliferation of substandard products and contraband goods from gaining entrance into the nation. According to the former president of National Association of Government Approved Freight Forwarders(NAGAFF), Dr. Eugene Nweke who spoke to MMS Plus, the Customs also “protect the nation’s natural heritage from being explored illegally, the prohibition of unhealthy trade amongst business owners, collation of data for the purposes of national planning, interrelationship with other government agencies to ensure security efficiency for the well- being of the nation as well as the generation of revenue”.

The question that has remained unanswered is whether the NCS is still performing these functions in an equitable manner or have they left other functions to concentrate their efforts on revenue generation so as to meet up with the target set for them by the Federal Government.  If revenue generation is the only concern of the NCS,are the other functions left behind? If the answer is in the affirmative, what are the implications on the economy as well as the general well-being of the populace?

It is a known fact that importation has dropped drastically as a result of the deliberate efforts of the government to restrict importation and foreign exchange encumbrances and this has had impact on the flow of revenue to the economy. It is delusional to believe that seeming rise in the value of revenue being declared by Customs lately as duty generated can be sustained if the value of naira appreciates against the international currencies at the forex market.

It is a verifiable truism that the streams of bottlenecks created by Customs at the ports in cargo delivery precipitates increase in prices of the goods. The sole aim of doing business is to maximize profit and the prices of the various imported products are fixed after an importer has calculated the cost of shipping the products into the country. The high import duties paid by importers at the various ports in turn, affects the prices at which these goods are sold in the market.”

It has also been alleged that NCS apply different methods which are against the accepted global best practices to ensure that revenue is generated so as to meet up with the high revenue target.

According to, Dr. Eugene Nweke the Nigeria Customs generate revenue through “hook or crook” means which negates the global best practices. It has been established by the World Trade Organization (WTO); co-signed by World Customs Organisation(WCO) and Nigeria is a signatory to this law to the extent that Nigeria has domesticated what is called the “Agreed Customs Valuation” in 2003 which is a universal practice under General Agreement on Tariff and Trade (GATT) and CAP 45 of Customs and Excise  Management Act  ( CEMA)1958, schedule 4 which deals on the international best practices provides ”That there are seven steps to observe in valuing goods imported into a country for the purpose of Customs duty collection. One of them is the commercial value on imported goods which the value is issued by the exporter from the country of origin” he said.

 He added, “In this step, if before a Customs officer, a particular commercial value is presented by an importer or a shipper, and it is not acceptable by the Customs officer, then the Customs officer has shifted the burden of proof to the importer or shipper and if the importer or shipper goes to attest to the price  at which the products were purchased for, then he pushes what is called the ‘burden of integrity’ to the Customs officer and if the Customs officer insists that the commercial value is not acceptable for whatever reason, the law provides that the next step should be applied and it must go sequentially. At this point, it is the shipper or the importer that will determine which value that will be used in valuing the products.

“But what do we  have in Nigeria? Once your goods comes into this country and approach the pass system, every goods has been benchmarked by container denomination, a twenty foot container is benchmarked at two million Naira  and a forty feet container is benchmarked at four million naira. Now, where do you now introduce the aspect of the importer telling you to use a particular method  in determining the commercial value of the imported products? The Nigerian system does not provide a platform where importers present themselves to be proven beyond reasonable doubt. He is being cowed and coerced to accept a benchmark”, he posited.

  Mr. Lucky Amiwero,  president of the National Council of Managing Directors of Licensed Customs  Agents (NCMDLCA) , stated that  it is indeed wrong for the CGC to place high premium on revenue generation, stressing that such pronouncement is rather unprofessional .His words,” It is not correct. You do not do anything possible to generate revenue. There is a decline in importation as a result of the exchange rate at the global economy. Where in this world are we talking about target? We are talking about sincerity and all the rest. A country that is not secured is talking about revenue, which revenue is he talking about? That is not a professional statement and the Nigeria Customs should not be making such statements”

 He added that ” The  Nigeria Customs is just there to implement government policies and when the policies are friendly, there will be more importation. Customs is there to balance the economy, to make the economy to thrive. If you kill the system in the course of trying to meet your target, what do you do? Generation of revenue should not be used to measure the performance of the Nigerian Customs. What is revenue when companies are closing down and there is decline in employment rate”.

In his contribution, the Acting President of the Association of Nigerian Licensed Customs Agent (ANLCA),Mr . Kayode Farinto  stated that the current Customs administration is not doing what it is supposed to do in the areas of trade facilitation and ease of doing business. He declared that the new government which will come by next year has the duty of repositioning the Nigeria Customs to its proper place. He argued   that the incumbent Nigeria Customs administration lacks professionalism and is only pursuing the target given to it  as well as their own respective personal targets.

“The target is wrong and it is not in line with the government’s policy on ease of doing business. We are only playing with trade facilitation and always putting target in the front burner, it is wrong. This even negates international best practices and that is why we say that from now on, the new government that is coming next year should concentrate on trade facilitation, because once we facilitate good trade, more revenue will come,and not this issue of jettisoning trade facilitation over revenue. Moreover, the high revenue target given to the Nigeria Customs is a contributory factor to the high inflation rate being witnessed in the country currently,”he said

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