The House of Representatives Committee on Customs and Excise has ordered the Nigeria Customs Service (NCS) to stop collecting the one per cent Comprehensive Import Supervision Scheme (CISS) levy and the 7% cost of collection, declaring them illegal and not backed by any existing law.
Chairman of the Committee, Hon. Leke Abejide (ADC, Kogi), issued the directive on Monday during a budget defence session with the management of the Customs Service regarding its 2025 proposal.
Abejide stated that the only legally recognised funding for the Customs Service is the 4% Free-on-Board (FOB) allocation, as stipulated by law.
While acknowledging that the NCS exceeded its 2024 revenue target, he criticised the poor funding it received from the federal government.
He added that the Committee would permit the collection of the 1% CISS and the 7% cost of collection only until June 30, 2025. From July 1, he warned, any continued collection of the levies would be deemed illegal and would attract legal consequences.
Responding to the Committee, Deputy Comptroller General of Customs in charge of Finance, Bello Mohammed Jibo, who represented the Comptroller General, explained that the implementation of the 4% FOB had been temporarily suspended to allow for stakeholder sensitisation.
However, Abejide dismissed the explanation and insisted on compliance with the law.
He warned that if the Customs Service fails to comply with the directive, the House would take legal action, stressing the importance of upholding the Customs Management Act.
Abejide also highlighted the underperformance of the 2024 budget, noting that personnel costs stood at 43.53%, overhead costs at 46.34%, and capital project performance at 45.68%, despite the service generating N6.105 trillion against a target of N5.079 trillion, a 20.21% increase.
He expressed shock that despite the substantial revenue performance, the Customs could not adequately fund its operations in 2024. Particularly troubling, he said, was the fact that 60% of the CISS levy, intended to fund overheads, personnel, and capital projects, recorded zero remittance to Customs’ accounts throughout the year.
“It is in the opinion of this committee that you should tell us what went wrong because the purpose of creating 1% CISS was to take care of service providers back then such as COTECNA, SGS, and GLOBAL SCAN who were responsible for valuation and the issuance of Risk Assessment Report (RAR) and maintain scanning operations.
“Also, payment is equally made to Web Fountaine Limited, which provided network and automation to NCS. But about 80% of these operations and work schedules have been taken over by the Nigeria Customs Service. Therefore, why are you not getting your share of 60% of the 1% CISS?
“However, this committee is not unaware that CISS is not backed by any law in Nigeria. It is not in the Laws of the Federation of Nigeria, and even your 7% cost of collection is equally illegal, as it is not in the LFN. The only legal source of income back by the Act of Parliament as signed by the President of the Federal Republic of Nigeria into Law and is Gazetted in LFN is the 4% Free-On Board (FOB) which can be found in section 18(1a) of Nigeria Customs Service Act, 2023 (Federal Republic of Nigeria official Gazette No. 105 Lagos -9th June, 2023 Vol.110).
DCG Jibo said the Nigeria Customs Service was established to take charge of the collection of Customs and Excise revenue and account for such in a manner as may be directed, suppressing smuggling activities, arresting and prosecuting offenders and carrying out trade facilitation
He said despite the attendant high revenue grants to duty exemptions, waivers, and concessions, the continuous drop in cargo throughput due to economic stiffness, the effect of currency floatation that results in unfavourable trade volume and the expected revenue inflow and the de-excise of many excisable commodities, leaving only a few; cigarettes, beer, and alcoholic beverages, the service was able to record some remarkable achievement in 2024.
He also said, aside from government policy measures that exempted payments of Customs Duties and import VAT on some essential food commodities in 2024 and a delay in the rollout and implementation of the 2023 fiscal policies, the service would have performed better than it did during the year.
Jibo said the management of the Nigeria Customs Service is considerably determined to ensure that the 2025 to 2027 Fiscal strategy plan scales through successfully, adding that to achieve the set targets.
To achieve this, he said, there was a need for the Customs modernisation project, with the introduction of the newly launched Unified Customs Information System, which provides a platform for full automation of all Customs procedures, which is expected to enhance revenue collection efficiency.
He said further that the Service’s Management is intensifying its efforts to achieve more effective revenue recovery interventions, stressing that with the collaboration of WCO in developing an operational manual for PCA, there will be a better approach to revenue recoveries through the PCA, Systems Audit and Valuation.
He maintained that the Nigeria Customs Service has implemented the Authorized Economic Operator (AEO) and Advanced Rulings programme, and consequently developed and built same into its operations which will boost the trade facilitation drive, enhance the release time of goods, improve the turnover time of Import and Export, and increase revenue generation as well.
He disclosed that to tackle the menace of revenue leakages through smuggling, stakeholder engagements remain a striking agenda of the management of the Nigeria Customs Service. Hence, the Service seeks to engage more relevant authorities to ensure effective collaboration and security along the national borders.
He called for the introduction of more scanners across Customs formations and the adoption of surveillance equipment will aid better revenue generation in 2025 and going forward, saying that with accelerated clearance and timely release of goods, the floating exchange will remain favourable to trade.
He recommended other measures such as the re-introduction of excise on telecom services and single-use plastics policies, as well as a review of the tax expenditure policy of the Government to ensure a reasonable application that may not impose maximum negative impact or pressure on revenue.
He also said that the Service anti-smuggling campaign, using all required operational guides as provided within the confines of Customs laws, will be intensified to ensure that illicit trade that creates a sphere for revenue leakages, as well as economic sabotage, is brought to the barest minimum.
