By Ayomide Otitoju
The Nigeria Customs Service (NCS) has announced the suspension of the implementation of a 4% Free-on-Board (FOB) charge on imports following intense opposition from industry stakeholders.
In a statement on Tuesday, Customs spokesperson Abdullahi Maiwada said the suspension would allow for further consultations between the Minister of Finance, Olawale Edun, and relevant stakeholders.
Background on the Charge
The 4% FOB charge was introduced to replace the previous system, where firms like Webb Fontaine handled import inspections for a 1% fee under the Comprehensive Import Supervision Scheme (CISS). However, the policy faced resistance from importers and businesses concerned about its financial impact.
Maiwada explained that the timing of the suspension aligns with the expiration of the contract agreements with service providers, including Webb Fontaine, which were previously funded through the 1% CISS. He noted that the review presents an opportunity to restructure the revenue framework of the NCS.
Addressing Funding Gaps
Under the Nigeria Customs Service Act (NCSA) 2023, the 1% CISS and the 7% cost of collection were scrapped, leading to funding shortfalls in Customs operations. The 4% FOB charge was introduced to provide sustainable funding for customs modernisation efforts.
“The new Act addresses these challenges by consolidating ‘not less than 4% of the Free-on-Board value of imports,’ ensuring stable funding for critical Customs operations and modernisation initiatives,” Maiwada stated.
Next Steps
The NCS stated that the suspension period would be used for broader stakeholder engagement to ensure alignment with the Act’s provisions. The Service assured that a revised implementation timeline would be communicated after consultations are concluded.
