A frontline freight forwarder; Chidi Anthony Opara has alleged that personnel of the Nigeria Customs Service (NCS) short-change the Federal Government of revenue accruable to its coffers through the popular issuance of demand notices (DN) to Importers or clearing agents
A Customs Demand Notice is a form of Invoice/memo issued to an importer or exporter if the duty paid /levied is found to be less than the due. Such an importer or exporter is required to pay the balance of the appropriate duty through the issuance a debit note (DN).
The Customs Act mandates filing of correct declaration by importers or exporters in respect of imported /export goods with regard to value, description of goods, classification, exemption notifications having bearing on assessment of Customs duty etc.
The Customs duty is determined in terms of Section 15 or section 16 of the Customs and Excise Management Act (CEMA) in respect of imported or export goods. If the duty paid / levied is found to be less than the due, the importer or exporter is required to pay the shot levied / non-levied or short paid / non-paid amount of duty. In this regard, the Customs Act, empowers officers to issue a demand cum Show Cause notice for recovery of amount of duty short levied/ none levied from the importer/exporter.
According to checks by our correspondent, Section 28 of the Customs Act, provides for recovery of any duty which has not been levied or has been short-levied or erroneously refunded or if any interest payable has not been paid, part-paid or erroneously refunded, provided a notice demanding such duties/interests is issued within the time limit specified in that Section.
The Act says that, “Where the short levy is by reason of collusion or any willful misstatements or suppression of facts by the Importer, the period for issuing the demand notice is five years from the relevant date specified in Section 28”
However, the freight forwarder, in a letter to the Nigeria Customs Service alleged that its personnel are taking advantage of the fluidity of the process of issuing DN to enrich their pockets by compromising through negations with exporters/importers through their clearing agents.
He alleged that the customs officers pocket the proceed from the negotiations there by short changing the federal government.
In a letter addressed to Customs through their information platform ([email protected]), he wrote:
“Information reaching me from very reliable “information volunteers” have it that Customs officers at the beats demand and negotiate for "Compromise Demand Notices (DN)".
He added that: “Compromise Demand Notices"(DN) basically ensure that defaulters pay less than what they are supposed to pay, “these Customs officers pocket the proceeds from these negotiations”.
According to him, “thereafter the Customs Command leaderships would go to the media to announce revenue recoveries, which in actual fact, are portions of what ought to have been recovered”.
He lamented that, “such media outings indirectly make the defaulting freight forwarders and importers out as the only culprits. This trend must not continue”,
But, corroborating Mr Opara’s allegations, an importer who pleaded anonymity confirmed to our correspondent that abuse of DN is a common practice among Customs officers.
He said demand notice is issued to an importer/exporter who has paid less duty by error or it is issued to exporter / importer who deliberately want to short change the government through wrong information.
According to him, “there are two reasons the Customs will issue demand notice; first, if it is by human error and without any deliberate attempt the importer pays less duty expected to pay or by willful mistake to short change federal government, by stating wrong information”.
“For error, the order should be made with three years from the date in which the customs duty was due. In case of erroneous refund, three years from the date of such refund.
“For willful misstatement/fraud: 5 years from the date in which the customs duty was due. In case of erroneous refund, five years from the date of such refund, the Order can be issued.
“The importer or the exporter to whom a notice is served under the Section 28(4) of the said Act pays the duty within 30 days of receipt of the notice. The amount of payment would be duty in full or in part as may be accepted by him plus the interest payable thereon under Section 28A of the said Act and penalty equal to 25% of the said duty.
“When the short levy is discovered or pointed out by audit, a notice is served on the importer or the persons chargeable with duty to show cause as to why the amount due should not be recovered from him”, he stressed.
But, “customs officers will rather go into negotiation with you, cut the cost, pocket the money and the government loses revenue that ought to be accrued to them”, he said.
Also speaking, a freight forwarder and Vice President of the Association of Nigeria Licensed Agents (ANLCA) Dr. Kayode Farinto said he was not aware of such practice among the freight forwarders or the men of NCS, he said he was not sure whether such practice takes place.
His denial was however faulted by all the clearing agents that were spoken to by our correspondent. Even though they all pleaded anonymity for fear of reprisal by Customs officers, they alleged that negotiating DN is a common practice between Customs officers and clearing agents.
But denying the allegation when confronted by our correspondent, the Customs Public Relation Officer Tin Can Command, Uche Ejesieme, denied that negotiating Debit Note takes place, even as he described the allegation as a figment of the writer’s imagination.
According to him, “everything centers on issue of non-compliance, if importers or exporters comply on directive, there is no way such thing will happen.
Specifically, he said “in Tin Can we have a standard operating procedure which the Customs Area Controller developed shortly on assumption of duties, and part of that is emphatic on due diligence, so the allegation can best be described as a figment of the writer’s imagination, because there are no specific cases that he can use to buttress what he is saying”.
“The idea is that, if there is any DN that is issued and you as the importer is not satisfied or convinced about, you can approach the resolution committee or the help desk, the resolution committee was set up to address issue relating to DN, Valuation and all that. If at any point in the trade value chain, somebody feels cheated, we have a veritable ground put in place that has been created by the command to resolve this”, he said.
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