Customs Grants Over N1.4trn Waivers In Three Years

The Nigeria Customs Service (NCS), granted over N1.4trillion as waivers on imported goods in the last three years.

Import duty waivers, concessions and exemptions are used by the governments across the globe to protect local industries, boost the economy and create jobs but they have typically been abused in the country and have become a conduit pipe to syphon public funds.

Between January 2019 and December last year, the sum of N992.9 billion was granted as waivers.

Over N400 billion, sources at the Customs Headquarters said, has been granted as waivers by the Service between January and October this year.

The senior official who craved anonymity urged the Senate to amend the Customs And Excise Management Act (CEMA), noting that the amendment will take care of under declaration, which he said, was introduced by some officials of the government to circumvent duty payments with some importers.

The NSC official said the amendment would create a very decent and respected Customs Service outfit devoid of suspicion and unnecessary invasion of their statutory job by some politicians.

“Over 35 per cent of the total tax relief on imported goods is the relief granted on import duties, the Common External Tariff Levy accounts for nearly 30 per cent of the tax relief, 23 per cent of the tax relief is granted on VAT.”

The Service, Economic Confidential learnt, also recorded about 5,000 seizures between the first 10 months of this year.

The N1.4 trillion, it was gathered, includes the over N400 billion recorded between January and October this year, the N213.1b recorded in 2019 and N779.7b waived last year.

Data from the 2022-2024 Medium-Term Expenditure Framework and Fiscal Strategy Paper revealed the figures in 2019 and that of last year.

A member of the Association of Nigerian Licensed Customs Agents (ANLCA), Dr Kayode Farinto said, while import duty waivers are used by the leaders of other countries to protect the economic base of their countries, mostly, in protecting local industries, creating jobs and promoting exports, the reverse is the case in Nigeria.

Apart from abusing the waivers, there is nothing specifically to show for it in the last 20 years.

A breakdown of the waivers granted in 2019 showed that exemptions on import charges stood at N127.7 billion; surcharge, which consists of seven per cent import duty, was N8.6 billion; and common external tariff levy, N4.6 billion; Comprehensive Import Supervision Scheme, N2.6 billion; while exemptions under the Economic Community of West African States (ECOWAS) Trade Liberalisation Scheme was N4.8 billion.

Other customs exemptions recorded within the year are Iron Levy, N393.2 million; National Automotive Council Levy N233.6 million and import Value Added Tax (VAT) which stood at N64.4 billion.

For last year, reliefs granted was estimated at N780 billion, comprising N600 billion from waivers of import duties and N180 billion from VAT on import duties.

An importer, Mr Segun Adetula, b said MDAs are an integral part of the Nigerian economy and therefore should be subjected to the same rules that apply to other economic players, otherwise, they could become a major source of distortions in the economy.

He said a discriminatory or selective import duty might create incentives for imports by the MDAs to the detriment of locally produced goods, adding that import duty waiver or tariff concession should be targeted at sectors or products that are strategic from an economic, social or security perspective

The National President, Africa Association of Professional Freight Forwarders and Logistics in Nigeria (APFFLON), Otunba Frank Ogunojemite, said there is nothing special with the MDAs flouting of the waivers, noting that the shipping companies flouted government directives on rent waivers for importers even during COVID-19.