In a move aimed at fostering stakeholder collaboration and ensuring smoother implementation of its new revenue framework, the Nigeria Customs Service (NCS) has announced the suspension of the 4% Free-on-Board (FOB) charge on imports.
This decision, revealed in a press statement issued on Tuesday, follows extensive consultations with the Minister of Finance and Coordinating Minister of the Economy, Mr. Olawale Edun, and other key stakeholders.
The 4% FOB charge, introduced under Section 18(1)(a) of the Nigeria Customs Service Act (NCSA) 2023, was designed to consolidate revenue streams for the Service. It replaces the previous 1% Comprehensive Import Supervision Scheme (CISS) and 7% cost of collection, which were repealed by the new Act. The suspension of the 4% FOB charge will allow for broader stakeholder engagement and a comprehensive review of the implementation framework.
According to the NCS, the timing of the suspension coincides with the expiration of the contract agreement with service providers, including Webb Fontaine, who were previously funded through the 1% CISS. This presents an opportunity for the Service to holistically review its revenue framework and address operational inefficiencies that arose from the previous funding model.
The NCS emphasized that the new Act aims to modernize customs operations and ensure sustainable funding for critical initiatives. Under the Act, the Service is empowered to adopt technological innovations to enhance efficiency and transparency. Key provisions include the development of electronic systems for information exchange between the NCS, other government agencies, and traders, as outlined in Section 28 of the NCSA 2023.
The Service has already begun implementing several digital solutions, such as the recently deployed B’Odogwu clearance system, which has reportedly reduced clearance times and improved transparency for stakeholders. Other innovations authorized by the Act include the Single Window implementation, risk management systems, non-intrusive inspection equipment, and electronic data exchange facilities.
The suspension period will allow the NCS to engage more deeply with stakeholders and ensure proper alignment with the Act’s provisions. The Service remains committed to fulfilling its dual mandate of revenue generation and trade facilitation while prioritizing the interests of its stakeholders.
In the press release, Assistant Comptroller of Customs and National Public Relations Officer, Abdullahi Maiwada, stated that the NCS will communicate a revised implementation timeline once stakeholder consultations are concluded. The Service assured the public of its dedication to implementing the Act in a manner that best serves the nation’s economic interests.
This development comes as part of the NCS’s broader efforts to modernize its operations, improve efficiency, and foster a more transparent and stakeholder-friendly environment. The suspension of the 4% FOB charge is seen as a strategic pause to ensure that the new revenue framework is rolled out effectively and with the full support of all relevant parties.
