Former Senate President Bukola Saraki has expressed strong reservations about the new 4% charge on the Free On-Board (FOB) value of imports, recently introduced by the Nigeria Customs Service.
The charge, which was announced by Customs Spokesman Abdullahi Maiwada on Wednesday, is expected to generate an additional N2.84 trillion annually, based on the country’s estimated N71 trillion annual imports.
“The FOB charge, which is calculated based on the value of imported goods, including the cost of goods and transportation expenses incurred up to the port of loading, is essential to driving the effective operation of the service,” he said.
Saraki, who took to social media to voice his concerns, questioned the need for the new charge, given that the Customs Service already has a budget and receives an incentive percentage on total customs duties collected.
He argued that the additional revenue would be used to cover running costs, estimated at over $1.5 billion, which he deemed excessive considering the country’s poverty index and the struggles faced by many businesses.
The former Senate President also criticized the fact that the new charge is not limited to luxury goods, but applies to all imports, including raw materials used by industries. He pointed out that this would result in an additional 80% charge on the duty amount as administrative fees, which would be passed on to consumers, further straining their budgets.
Saraki urged the government to reconsider the policy and put it on hold immediately.
His words:
With our annual imports estimated at N71 trillion, the new 4% customs administration charge on Free On Board (FOB) value will come to N2.84 trillion. Does this mean that the Customs Service requires an additional N2.84 trillion annually to do its job?
Don’t forget they already have a budget and get an incentive percentage on total customs duties collected.
Now, they want to spend more than $1.5 billion on running costs in a country with the poverty index we have and with many businesses closing down.
Importers will inevitably pass these costs on to consumers, further straining the budgets of millions of struggling households.
This new fee of 4% is not even restricted to luxury goods but across all imports, so even for industries that import their raw materials whose duties are only 5%, the customs agency will now charge importers an extra 80% of the duty amount as administrative fees!
How can this make sense or support the government’s policy of promoting the ease of doing business?
The government must urgently reconsider this policy and put it on hold immediately. Especially not now with what Nigerians are going through.