For about three weeks, importers and clearing agents have been up in arms against the Nigeria Customs Service. The bone of contention is the recently-introduced Vehicle Identification Number for Valuation of duty payable on imported vehicles.
The new policy which led to an impasse between licensed customs agents and the Service has led to work paralysis at the Tin Can and PTML ports, leading to non-clearance of thousands of vehicles that have arrived at the country.
To break the ice, a town hall meeting was organized by the Nigeria Customs Service (NCS), to hear the grievances of stakeholders regarding the controversy. It ended in a deadlock.
Eventually, by Thursday of last week, words filtered in that the NCS has bowed to pressure and has suspended the implementation of VIN valuation policy for 30 days to enable importers to clear their trapped vehicles, and also to allow Customs fine-tune the implementation modality.
The introduction of VIN did not completely emanate from the NCS. It is a part of the directive of the Central Bank of Nigeria (CBN).
We recall that the CBN had introduced the e-valuation and e-invoicing system in the import and export system in order to enhance revenue generation. The Nigeria Customs Service, which is desirous of higher revenue only keyed into it.
This is not the first time that, Customs is rejigging its operational modalities. In the history of the Nigeria Customs Service, there had been attempts to modernize and automate its operations. First, there was the ageless ‘Customs Long Room’, which first generation clearing agents knew, until Brigadier General SOG Ango became the Sole Administrator and he scrapped it; this gave birth to Customs Processing Centre (CPC) in the late 1990s.
Subsequently, the service embraced automation. It veered into the Automated System for Customs Data (ASYCUDA) series, and later the NICIS 1and 2.
There is no doubt that automation is a powerful tool to facilitate trade and also make life easy for both the users and stakeholders to enjoy seamlessly operation, without having to pay for unnecessary costs incurred in clearing of goods during the era of destination inspection.
When in 2013, the Nigeria Customs Service took over from the destination inspection agents, it said it was embracing modernization and automation, the expectation was that, it would usher-in an era of paperless environments, internet-based systems, single window environments and harmonisation/standardization.
Whereas automation has the potential to facilitate trade while also helping to meet objectives related to the maintenance of national and social security, some countries that have also embraced automation have experienced smooth trade flows; can this be said about Nigeria and its Customs Service?
Predictable border services, customs clearance time and trade transaction costs are added advantages of automation. Apart from these, it serves other purposes than facilitating movement of goods and people. It reduces level of smuggling, corruption, increased productivity in customs operations, and improvements in valuation methods which may have the added benefit of increasing government revenue.
We also recall that, after seeing to the sack of the destination inspection agents, Customs handed over its automation transformation to Messrs Webb Fontaine, hence the creation of: software products, electronic single window portals, Customs automation, information and telecommunications technology and infrastructure services, peripherals and consumables, business process reengineering and standardization.
It is instructive that importers and clearing agents who deal in imported vehicles have said clearly that they are not opposed to the introduction of VIN for the purpose of calculating duty on such vehicles. They only question the modality of arriving at the duty payable.
They argue that the purpose of VIN is to make sure that the chassis numbers of your vehicle are captured to tell the government through the Customs how much to pay as duty.
There is also logic in the argument that internationally, there is depreciation of vehicles on a yearly basis.
Read Also: Who should be liable for demurrage on account of the VIN protest?
There is also logic in the fear being expressed by clearing agents, that going by the way the Customs under Hameed Ali is raking-in revenue annually, the real essence of VIN may jolly well be to hike what it collects as duty on imported vehicles.
This fear may also well be real, as the embattled clearing agents and the importers alleged that duty payable on vehicles have gone up by as much as 100 per cent since VIN was introduced.
Without advocating the position of the importers and the clearing agents, perhaps one could ask: After all the noise about mordernisation, information technology, what has become of the Nigeria Customs Service and its personnel.
Every stakeholder in the Nigeria maritime industry will agree that, lately automation has aided customs revenue, but at whose expense.
Automation is not all about revenue generation, it should also reduce corruption by reducing human interface.
We are worried that, even with automation, single window, and other associated IT-driven methods that the NCS has introduced into the cargo clearance process, corruption is still endemic in all the nation’s entry points.
The current face-off over the VIN valuation has its roots in mistrust and failure of the customs operational modalities. Where there is automation and electronic transaction, there should be no argument about computation of payable import duty. But, in this case, the Nigeria Customs Service has been less than honest and transparent in its valuation process.
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