Customs Suspends 4% FOB Charge On Imports

The Nigeria Customs Service (NCS) has announced the suspension of the 4% Free-on-Board (FOB) charge on imports, which was included in Section 18(1)(a) of the Nigeria Customs Service Act (NCSA) 2023. This decision follows widespread public criticism of the charge, which many stakeholders had warned would further drive up Nigeria’s inflation rate.

In a statement released on Tuesday, NCS explained that the suspension would allow for in-depth consultations with the Minister of Finance and Coordinating Minister of the Economy, Mr. Olawale Edun, and other relevant stakeholders to address concerns about the policy. The suspension is also in line with the expiration of the contract agreements with service providers, such as Webb Fontaine, which had been previously funded through the 1% Comprehensive Import Supervision Scheme (CISS).

Customs spokesman Abdullahi Maiwada clarified that the suspension aligns with efforts to review the revenue framework, addressing inefficiencies created by the previous separation of the 1% CISS and the 7% cost of collection. The newly introduced NCSA 2023 aims to consolidate the funding through the 4% FOB value on imports, which was intended to support the funding of crucial customs operations and modernization projects.

The suspension also provides an opportunity for the NCS to further optimize its operational frameworks to better serve stakeholders and the nation’s interests. Customs is focused on implementing various technological innovations under the NCSA 2023 to improve operational efficiency and streamline processes.

Among the digital solutions being implemented are the B’Odogwu clearance system, which enhances clearance times and transparency, as well as other initiatives such as the single window system, risk management systems, non-intrusive inspection equipment, and electronic data exchange facilities.

The suspension will allow NCS to engage more effectively with stakeholders and refine its approach to modernizing customs operations in line with the provisions of the Act. Customs has assured the public that it will communicate a revised implementation timeline after the completion of these consultations.

“The NCS remains committed to implementing the provisions of the Act in a manner that best serves our stakeholders while fulfilling our revenue generation and trade facilitation mandate,” the statement concluded.