The National Assembly has begun a public hearing on a bill to modernise the Nigeria Customs Services, but the move is not without rancour from the Ministry of Finance, Organised Private Sector (OPS), and other stakeholders at Nigerian ports. The Senate and House of Representatives, at separate public hearings last week emphasised the fact that the extant law under which the Customs operates is archaic and in need of changes in line with global best practices.
In the Senate, the Chairman of the Committee on Customs, Excise and Tariff, Senator Francis Alimikhena, said the Bill is aimed at modernising the Customs Service making it competitive in the global quest for trade facilitation.
It would make the Nigeria Customs Service a legal organisation under the supervision of the Ministry of Finance and a Board that will operate in an efficient manner to serve the Nigerian public, he added among others.
The Minister of Finance, Zainab Ahmed, at the House of Representatives public hearing, frowned at the idea of a new regulatory body to supervise the Customs Service and the appointment of a board to be chaired by a person appointed by The Presidency. Over the years, the Minister of Finance also served as the chair of the board of the NCS.
The Permanent Secretary of the Ministry of Finance, Mr Aliyu Ahmed, who spoke at the public hearing, told the committee that: “The contemplation of an autonomous Customs Service is in abeyance with extant laws regarding the treasury, supervision of the treasury and all agencies, which remit funds to the Federation Account and the Consolidated Revenue Fund.
In line with the Finance (Management and Control) Act, FMFBNP is the relevant authority charged with the responsibility of ensuring compliance with the Customs and Excise legislation regarding trade and fiscal policies and where appropriate, applying other relevant provisions applicable to goods subject to such measures. The composition of the Board as proposed by the Bill is unwieldy with the inclusion of the Chairman and thirteen other members and the DCGs… This is not in alignment with Section 80 of the Constitution of the Federal Republic of Nigeria, which creates the Consolidated Revenue Fund and the provisions of Section 4 of the Finance (Management and Control) Act (2004) Laws of the Federation of Nigeria.”
In the debate in the National Assembly over this Bill, emphasis has been placed on revenue generation to the detriment of the important role of protecting Nigeria’s borders against contraband and non-standard products that have flooded Nigeria. This is not the practice in several advanced countries. For instance, in the United Kingdom, Her Majesty’s Revenue and Customs (HMRC) is the agency responsible for all revenues, including excise duties. It is the equivalent of Nigeria’s Federal Inland Revenue Service (FIRS). The job of protecting UK borders is carried out by UK Border Agency, responsible for ensuring that contraband goods do not enter the UK. Several other countries have the same approach, separating revenue collection from securing their borders. The aberration in Nigeria is so glaring that our Customs even gives waivers to importers of goods, a role that should be carried out by the Ministry of Finance.
Aggressive revenue drive is so pronounced in Nigeria to the extent that the Customs is given revenue targets and it takes about three percent of what the Service generates. What happens if Customs collects revenues, far and above its target? The situation is so obnoxious that the Customs, due to poor border management, allows contraband to enter into the country, only for its operatives to enter into the market to impound the goods.
As the National Assembly is considering an amendment to the Customs Act, we encourage them to tidy up the loose ends that make it difficult for the Customs to be effective in policing the borders against fake, substandard and contraband items. The amendment should emphasise a clear and transparent payment system into the Federation Account and this could be done effectively by the FIRS. The job of the NCS is well cut out for its operatives. It has failed due to its focus on revenue. Let our Customs properly control our borders against injurious goods and contraband, instead of fighting to collect revenues.
