The Nation Newspaper

Tag: Waivers

  • Firms to lose tariff waivers on imported items

    Firms to lose tariff waivers on imported items

    • Okays N6.32b for two aviation contracts

    The Federal Government said it would review waivers being granted on duties in the country.

    Minister of Information and National Orientation, Mohammed Idris, who disclosed this to reporters after the week’s Federal Executive Council (FEC) meeting  presided over by President Bola Tinubu, said the Council decided to review the decision on waivers in order to help the nation minimise revenue losses.

    “There is also the issue of other economic policies that were discussed at Council today. Of note is the issue of waiver, in addition to so many other decisions taken. You’ll recall that Customs has reported that in 2023 alone, they’ve lost over N1.3 trillion to waivers.

    “Council has decided to look at those waivers and review them so that Nigeria will not continue to lose money at a point that we all need these resources for the development of the country,” he said.

    FEC also approved two contracts worth N6.32 billion for the Ministry of Aviation and Aerospace Development.

    Minister of Aviation and Aerospace Development, Festus Keyamo, said the approvals were for both the main ministry and the Nigerian Airspace Management Agency (NAMA).

    According to Keyamo, the first contract, involving technical support services at the Murtala Mohammed International Airport in Lagos, was cost at N4.1 billion, while the second one, sited at the Port Harcourt International Airport, involving the fixing of some navigational equipment, was cost at N2.23 billion.

    “Basically, the Ministry of Aviation and Aerospace Development presented two memos; one from the main ministry and another one from one of its agencies, which is NAMA. The first memo is actually a Technical Support Services contract with the CCECC, the Chinese company that built the new international wing of our airport in Lagos and of course the other four airports across the country.

    “So from the word go, we have struck a deal with the same people who built the place. It’s only natural that they are the same ones who should maintain their facilities for the first five years. That is what this technical support service contract is. For the first five years.

    Read Also: N1.8tr lost to waivers in 11 months, says Customs CG

    “We have said they should maintain their chillers, the air handling units, the passenger boarding bridge, the escalators at the concourse, the remote boarding lifts that were specifically made for the physically challenged, and all those facilities they put there.

    “It is for five years, the first five years for a contract sum of N4.1 billion, inclusive of 7.5% VAT, with a completion period of five years. So it says for the comfort of the traveling public, for Nigerians and for the enjoyment of the traveling public. So that is the first memo we presented and it was approved by Council.

    “The second memo has to do with some navigational equipment at the Port Harcourt International Airport. The equipment really are for communication, they call them the VHF FM radios, remote access devices and other accessories for the wide area multilateration air traffic management system at Port Harcourt.

    “So we are purchasing these equipment for Port Harcourt International Airport at the sum of N2,227,721,091, inclusive of 7.5per cent VAT, with a delivery period of nine months and it has been awarded in favor of a company that is actually the representative of one of the best companies in the world that produce such communication equipment for the aviation sector,” he said.

  • We’re not denying import waivers, says ministry

    •NGOs urged to follow laid down procedures

    The Federal Ministry of Finance has denied claims that it has refused to grant import duty waivers for the importation of drugs and health commodities into the country.

    A statement from the ministry yesterday in Abuja said there “are laid down statutory procedures governing the granting of import duty waivers to importers and Non-Governmental Organisations (NGOs), which are part of holistic measures put in place to check abuses of the Federal Government’s fiscal incentives and to put a halt to rampart corrupt practices in the economic sector”.

    The ministry, which is the government’s body that grants import waivers, lamented that it recently observed “flagrant abuse of the import duty waivers by some NGOs and importers, who smuggled other imported items into approved waivers issued for the importation of medical equipment and drug-related items”.

    It added that it has “observed that some importers and NGOs engage in the sale of imported drug items, which are meant to be distributed to the public free after being granted import duty exemption by the government.”

    This, the ministry said, “is in contravention of the provisions of Section 46 of the Customs and Excise Management Act (CEMA) of 1958 (as amended)”.

    It highlighted the procedures for granting import waivers as including “submission of an application by the importer and NGO to the Federal Ministry of Finance through the Federal Ministry of Health; evidence of registration with the Corporate Affairs Commission; submission of an approved Memorandum of Understanding duly signed by the minister or the Minister of State, Budget and National Planning between the donor agencies, the Federal Government and the recipient-NGOs”.

    It, however, warned that it would not succumb to cheap blackmail and acts of economic sabotage under the guise of the delivery of health services to the people.

  • No import waivers denial, says Fed Govt

    The Federal Government has not refused to grant import duty waivers for the importation of drugs and health commodities into the country.

    In a statement, the Federal Ministry of Finance, said there are laid down statutory procedures governing the granting of import duty waivers to importers and NGOs. It said these are part of holistic measures put in place to check abuses of the Federal Government’s fiscal incentives and to put a halt to rampart corrupt practices in the economic sector.

    The statement, signed by the Director of Information, Salisu Na’inna Dambatta, lamented that the ministry has recently observed the “flagrant abuse of the import duty waivers by some NGOs and importers, who smuggled other imported items into approved waivers issued for the importation of medical equipment and drug related items.”

    It said this practice, “is in contravention of the provisions of Section 46 of the Customs and Excise Management Act (CEMA) of 1958 (as amended).”

    The ministry listed the procedures for granting import waivers to include “submission of an application by the importer and NGO to the Federal Ministry of Finance through the Federal Ministry of Health; evidence of registration with the Corporate Affairs Commission; submission of an approved Memorandum of Understanding duly signed by the Honourable or the Honourable Minister of State, Budget and National Planning between the Donor Agencies, Federal Government of Nigeria and the Recipient-NGOs.”

    Other demands include, “presentation of a certificate of exemption from tax from the Federal Inland Revenue Service (only for those who engage in non-profit making activities in line with their objectives), submission of a proforma invoice, indicating the value of the imported items, bill of laden and if the imported items are donated, the NGOs are required to provide the Federal Ministry of Finance with authenticated letter from the donor agencies.”

    It said additional documentation may also be required where the need arises.

  • Reps investigate Customs import waivers

    Lawmakers in the Green Chamber yesterday mandated its Customs and Excise Committee to investigate the handling of import duty revenues, waivers and bonds on import duties collected by the Nigeria Customs Service (NCS) from 2010 till date.

    The resolution was sequel to the passage of the prayers of a motion sponsored by a member, Hon. James Abiodun Faleke (APC, Lagos) and 14 others.

    The committee is also mandated to “determine the nature and extent of abuse of the Customs Pre-Arrival Assessment Reports (PAAR) by importers and officials of the Customs Service in order to recover the revenues due to the Federal Government but  which were not paid.”

    The House further empowered the committee to probe the abuse of import duty waivers given by the Federal Ministry of Finance and its effects on the economy and identify the companies or individuals that have refused to redeem the bonds even after clearing their imports.

    The committee is to conclude its assignment and report back to to the House within 90 days for further legislative action.

    While moving the motion, Faleke said that except those that were granted waivers and are on the prohibited list, the Nigeria Customs Service is mandated, among other things, to collect duties on all goods imported into Nigeria.

    He said: “the Nigeria Customs Service customarily issues Pre-Arrival Assessment Reports which are used to assess duties payable on imported goods but the Reports are sometimes compromised by importers, thereby leading to under payment of duties in billions of Naira;

    “The Ministry of Finance gave series of duty waivers to companies in line with the policy of government to assist businesses, but in most cases, the waivers were used to import goods not listed on the approval, thereby depriving the government of the needed revenues;.”

    “Some importers, most times, issue bank and/or insurance bonds to Nigeria Customs Service in lieu of duty payments to enable the importers clear the imported goods immediately and thereafter expected to redeem the bonds by paying the appropriate duty rates, but information reveals that the Bonds are either partially redeemed or never redeemed at all.”

    According to the lawmaker,   the inability of the federal government to finance the 2017 budget and meet its other obligations made the ministry of finance to source for funds from local Banks and the capital market through “sukuk” etc., meanwhile there are leakages in revenue collections by the Nigeria Customs Service.

  • Consumers seek waivers as new tariff takes off

    Electricity consumers are asking for waivers from power distribution companies (DisCos), following the decision of the Federal Government to implement the new tariff, The Nation has learnt.

    Consumers, it was gathered, have been approaching the DisCos to cancel  some of their  debts in order to ease the burdens the new tariff is bringing upon them and charge  them less,  especially those  of them  that do not have meters, among others.

    Investigations showed that consumers, who owe fixed charges, were also meeting DisCos to cancel their debts. A veterinary doctor, Akininyi Emmanuel said consumers were asking for waivers because they know that they would not be able to pay the new tariff.

    He said consumers under the Ibadan Electricity Distribution Company (EBEDC) have been trying to get waivers since the new tariff took off about two weeks ago. Akininyi, who lives in Ibadan, Oyo State capital, said many have sought ways of negotiating with the company, following the introduction of the new tariff.

    When The Nation visited some of the Business Units owned by the Ikeja Electric and Eko Electricity Distribution Companies (EKEDC), it found out that consumers have been asking for concessions since February 1, when the new tariff took off concurrently with the removal of fixed charges.

    A staff of Ikeja Electric, who pleaded anonymity, said many customers, who came to recharge their meters have been asking for cancellation of the fixed charges they owed.

  • NLC seeks end to indiscriminate waivers

    •African govts ‘should prioritise security’

    The Nigeria Labour Congress (NLC) has urged the Federal Government to review the Customs and Excise Management Act (CEMA) so as to eliminate indiscriminate granting of waivers to importers who abuse such provisions in the Act.

     NLC faction President, Comrade Joe Ajaero, said the removal of such waivers would help boost manufacturing, as it would encourage the local production of goods  and address the instability in the foreign exchange.

    He said over the last decade, the Nigerian economy has grown impressively, but lamented that the economic statistics have never been in tune with the social reality, as unemployment and poverty soared to an unprecedented 23.9 per cent and 72 per cent, respectively in recent years. He added that it is apparent that the economy has grown without benefiting the people.

    He told The Nation that ending the country’s electricity woes, will require the new administration to develop a framework and strategy to deal decisively with smuggling as well as putting an end to counterfeiting made-in-Nigeria goods.

    “We demand a macro-economic policy regime that will address stability in the currency exchange regime, progressive tax administration and the management of the Customs and Excise duties in the manner that will promote local production of goods and services. We must bid goodbye to the destructive regime of duty waivers,” he said.

    Ajero urged President Muhammadu Buhari to concentrate his  efforts on expanding the frontier for job creation through value-added activities in agriculture, mining, mineral processing and industrial manufacturing.

    Ajaero pointed out that the growth and development of the real sector, and increased value addition in manufacturing, are critical for creation of  jobs, poverty elimination and for building a virile and sustainable economy.

    He urged the government to develop immediate framework and strategies to deal decisively with the hydra-headed challenge of smuggling, electricity failure, faking and counterfeiting of made-in-Nigeria goods.

    “Also, our effort to develop as a nation may not materialise except we resolve the lingering energy crisis in our country. As we have seen, privatisation has not in any way improved the supply of electricity to industries and homes across the country,” Ajaero said.

    According to him, this has led to factory closures and impoverishment of Nigerians. “This therefore, demands special attention to address the challenges of electricity supply in the country in particular and, in the immediate term, apply accelerated solution for industrial power needs,” he said.

    In a related event, NLC faction President, Comrade Ayuba Wabba, has urged African governments to make the issue of security a priority, especially in the east and west of the continent.

    Wabba made the call at the opening of a two-day annual meeting of the International Trade Union Confederation (ITUC), Africa Human and Trade Union Rights Network.

    The theme of the meeting is, “Insecurity and Threats to Peace in Africa and the Migration Challenges in Africa.” Wabba said armed conflicts and insurgency in Africa had assumed a new and dangerous dimension that no country could be said to be safe.

    ‘It is true that insurgency in Africa, particularly in the West African Sub-region and some parts of East Africa, has affected a lot of workers. In Nigeria, we have lost teachers and health workers because most of them live in the rural areas.

    “Therefore, if there is an attack by these insurgents, certainly the workers will be on the frontline so, we have lost a lot of them. It is time for African leaders to stand to up in unity and collaborate to end this menace,” he said.

    He said insurgency in Nigeria escalated due to a lack of political will to respond to the issue effectively when Boko Haram started, while the military was not initially strengthened to respond effectively.

    Permanent Secretary, Ministry of Labour and Productivity, Dr Clement Illo, said government had developed a migration policy that would address the challenges of migration in a more coherent manner in Nigeria.

  • Stockbrokers seek waivers on forex penalties

    Stockbrokers and dealers at the Nigerian Stock Exchange (NSE) have filed a joint appeal with the Securities and Exchange Commission (SEC), seeking waiver of penalties imposed on the operators for their failure to render weekly report on foreign-exchange transactions over the past four months.

    A reliable market source said the stockbrokers, under the auspices of Association of Stockbroking Houses of Nigeria (ASHON), has started discussion with SEC on waiver of penalties imposed from January 2015 till May 15, this year.

    SEC had imposed penalties on the market operators for failure to comply with rules and guidelines on anti-money laundering reporting. Stockbrokers are expected to report any foreign-originated and foreign-exchange based transactions to capital market authorities.

    A source said the apex capital market regulator might consider the joint appeal in order to encourage group compliance since ASHON has taken on the responsibility of mobilising and sensitising operators on the weekly report.

    SEC had last year granted waivers to public companies on the outstanding penalties over the failure of the affected companies to file their returns to the apex capital market regulators between 2008 and 2013.

    The waivers followed a dialogue between SEC and the Nigeria Employers’ Consultative Association (NECA).  Specifically, SEC granted 100 per cent waiver of all penalties imposed on public companies from 2008 to 2010 and 40 per cent waiver on outstanding penalties from 2011 to 2013.

    The engagement between SEC and NECA was sequel to complaints by companies, which had said they were not aware of the provisions on filing of returns.

    SEC had slammed penalties on the companies that failed to comply with SEC rules on filling requirements as stipulated by the Investment and Securities Act (ISA) 2007.

  • Ship owners seek removal of waivers, others

    THE Federal Government has been urged to cut interest rates to enable ship owners upgrade their facilities and compete with foreigners.

    Stakeholders urged the government to build a vibrant investment climate for the maritime sector.

    The Chairman, Logistic Chains, Bola Adebajo said there should be policies to create synergies between the industry and other sectors, such as banking and manufacturing.

    He said 60 per cent of the inward and outward bound goods in the West and Central Africa sub-region pass through the nation’s waterways, calling on the Central Bank of Nigeria (CBN) and the Minister of Transport, Senator Idris Umar to assist in developing the industry.

    He said the country needs to expand its merchant fleet based on the high volume of bulk liquid, gas and dry cargoes that pass through its waterways.

    He suggested measures, such as dedicated institutional financing mechanism for the shipping and maritime sector, a comprehensive maritime regulatory policy, to delineate the role and responsibilities of the government and private sector in the development of the maritime sector and building.

    Another stakeholder, and the President, Folas Motors, Mr Folagade Adeyemi, said the purchase of modern vessels, Adeyemi said, would also provide jobs for millions of Nigerians and the restive youths across the country.

    He said there was need for a sustained partnership between the private and public sectors for effective funding.

    The country, he said, had not enjoyed the commercial benefits of transporting large quantities of cargoes because the local ship owners lack the necessary capital.

    Adeyemi suggested that the Federal Government should integrate education into the university system so that Nigerians, who are interested in seafaring can get the necessary training needed to promote the sector.

    Adeyemi also  urged the Federal Government to remove the waiver clause from the Coastal and Inland Shipping Act (Cabotage Act of 2013).

    He  said over 50 per cent of firms have been shut due to the poor implementation of the Cabotage Law.

    “The removal will help to address the plight of indigenous ship owners whose businesses have been damaged,’’ Adeyemi, said, adding that it was sad that indigenous ship owners were not doing well despite that they started business in Nigeria.

    The waiver clause, according to him, has been made more important by the Ministry of Transport to the detriment of the implementation of the Cabotage Law itself.

    “I am alarmed at the kind of vessels that are granted waiver in Nigeria. Instead of giving waivers to specialised vessels in consonance with the dreams of the initiators of the Act, we end up giving waivers to anchor handling and tankers which the Act did not envisage for waivers.

    “In other climes, they do not leave the administration of waiver to be handled by the ever busy government officials like the Minister, Permanent Secretary or NIMASA, but rather, it’s an all-inclusive exercise where applications are received by the agency concerned and forwarded to the stakeholders who do the needful and make recommendations to the implementing agency which now carries out the recommended action,” Adeyemi said.

  • Customs loses over N48b to waivers

    • ‘Policy should be reviewed to reflect economic reality’

    The Nigeria Customs Service (NCS) lost over N48 billion to waivers between January and December, last year, The Nation has learnt.

    An official of the Ministry of Finance, who asked not to be named, said over N25.8 billion was lost between January and May.

    Justifying the waivers, the official said they were incentives used to support the private sector because of some of the regulatory challenges in the domestic business environment.

    According to him, sectors that benefited from waivers are hospitality, power, aviation and agriculture. There are also, solid minerals, steel and manufacturing.

    “There are also additional programmes, such as the Export Expansion Grant Scheme, designed to promote non-oil exports. These sectors are seen as strategic areas, which can stimulate growth, support diversification of the economy, and create jobs.

    “In the past, waivers were granted to individual businesses in an approach that resulted in rent-seeking behaviours and an uneven playing field for other businesses. It was precisely the need to stop such a discretionary approach that led to reforms by the Economic Management Team.

    “A sector-wide waiver policy was introduced to provide specific incentives for some strategic, job-creating sectors. Under this regime, all businesses in a sector have access to the same incentives.

    “In addition, some waivers and exemptions make up for gaps in our economy; for example, waivers to bring in vehicles for sporting events and conferences,” the official said.

    On the implication of the waivers to remittances into the Federation Account and seven per cent revenue accruals to Customs, he said: “We have to weigh the balance between putting money into the Federation Account, collecting Customs revenues and providing jobs for the teeming unemployed youths to providing the necessary incentives for private sector operators to stimulate growth and development. The government felt it has responsibility to perform in terms of job creation and see to the local production of some of the goods we consume.”

    But some Customs officers are worried by the loss because of dwindling resources from falling oil price and naira devaluation.

    About N55.96 billion, N55.34 billion and N59.42 billion were lost to waivers in 2011, 2012 and 2013.

    A senior official, who pleaded not to be named, advocated a periodic review of concessions and waivers to determine if they are necessary.

    The official said the concessions should be reviewed in tune with present economic reality.

    “The government needs to encourage local industries to grow but the concession and waivers agreements must be sealed with the interest of majority of Nigerians at heart,” he said.

    The official observed that the waivers were being exploited by beneficiaries, noting that the government had been granting waivers and concessions to companies and individuals without consideration for its economic implications.

    He urged the government to review its tax incentive policies and stop arbitrary granting of concessions and waivers that undermine use of the tax as a means of revenue generation from the ports.

  • Banks in Free Trade Zones get tax, duty waivers

    Banks in Free Trade Zones get tax, duty waivers

    The Central Bank of Nigeria (CBN) has said it would henceforth grant tax and duty waivers to banks operating in the Free Trade Zones (FTZs).

    CBN Director, Banking and Payment System, ‘Dipo Fatokun, who made this known in a circular, said the incentives will further the apex bank’s mandate for the development of banking operations in the country.

    The incentives, contained in the guidelines for banking operations in FTZ released yesterday, include freedom to move funds in and out of the zone on all eligible transactions, exemption from stamp duties on all its documents, exemption from withholding tax deductions on interest payable on deposits, dividends and royalties and exemption from corporate and capital gains taxes.

    The lenders, Fatokun said, will also be exempted from payment of duties on imports of furniture, office equipment and other facilities necessary for its operations; and any other incentives as may be approved by the CBN, from time to time.

    He said only banks or financial holding companies licensed under the Banks and Other Financial Institutions Act (BOFIA), or licensed foreign banks, shall qualify to apply to the authority for approval to establish presence to carry on banking business in Nigeria’s FTZs.

    The CBN Director said the provisions of the Nigerian Export Processing Zone Authority (NEPZA) Act, Oil and Gas Free Trade Zone Act, BOFIA, CBN Act, and Nigeria Deposit Insurance Corporation  Act and all guidelines and regulations issued pursuant to these Acts shall apply to banks operating in the FTZs.

    “Without prejudice to the powers of NEPZA to grant Licenses, no enterprise shall carry on banking business in any FTZ in Nigeria without a prior approval granted to the parent bank and banking license granted to the subsidiary by the CBN. The required minimum paid-up capital to operate in FTZ of Nigeria shall be $10 million, or such other amount as the CBN may from time to time prescribe. In addition, a bank in the FTZ shall meet all the prudential requirements as may be specified from time to time by the CBN,” he said.

    Fatokun said a bank in the FTZs shall disclose to the CBN, the equity interests of its directors and key officers in any enterprise in the zones within 14 days of acquisition of such interest.

    He said a licensed bank in the FTZ may accept deposits; grant to any person, advance, loans, or credit facility, or give any financial guarantee, or incur any other liability on behalf of any person; make remittances of funds abroad or to Nigeria Customs Territory on behalf of any non-resident; undertake any other foreign exchange transaction as may be prescribed by the CBN, from time to time; and carry out any other activity that may be approved by the CBN.

    However, the CBN stopped such lenders from sourcing foreign exchange from the official foreign exchange market of the Nigeria Customs Territory; opening an account for a customer in contravention of the Know-Your-Customer (KYC) principles; undertaking any other transactions which are inimical to the interest of the FTZ; and any other activity that may be specified by the CBN or other relevant authorities, from time to time.

    Also, banks within the FTZs are required to ensure strict adherence to the provisions of the Money Laundering (Prohibition) Act, 2011 (as amended), Terrorism (Prevention) Act, 2011 (as amended) and the Central Bank of Nigeria AML/CFT Regulations for Banks and Other Financial Institutions in Nigeria, 2013.

    The sources of funds for the lenders include deposits from non-bank customers such as Multinational Corporations, International Corporations, Non-resident or resident persons or entities, approved Enterprises in the FTZs, Regional Financial Agencies or Institutions and Euro-Money Markets; Inter-bank borrowing within the FTZs or with foreign banks; Export Proceeds; Equity Capital; and Such other sources of funds as may be approved by the CBN from time to time in consultation with the Authority.