Customs suspends 4% FOB charge

•terminates Webb Fontaine contract agreement

The Nigeria Customs Service (NCS) on Tuesday announced the suspension of the 4 percent Free On Board (FOB) charge. This is even as the Service announced the exit of the contract agreements with service providers which were previously funded through the 1 per cent Comprehensive Import Supervision Scheme (CISS), including that of Webb Fontaine.

In a statement signed by the Customs National Spokesman, Abdullahi Maiwada, the Service said that the suspension is the sequel to ongoing consultations with the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr Olawale Edun and other Stakeholders.

According to the Customs statement, “The Nigeria Customs Service (NCS) hereby announces the suspension of the implementation of 4 percent Free-on-Board (FOB) value on imports as provided in Section 18(1)(a) of the Nigeria Customs Service (NCSA) 2023.

“This is sequel to ongoing consultations with the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr Olawale Edun and other Stakeholders.

“This suspension will enable comprehensive stakeholder engagement and consultations regarding the Act’s implementation framework. The timing of this suspension aligns with the exit of the contract agreement with the Service providers, including Webb Fontaine, which were previously funded through the 1 percent Comprehensive Import Supervision Scheme (CISS). This presents an opportunity to review our revenue framework holistically.

“Under the previous funding arrangement repealed by the NCSA 2023, separating the 1 percent CISS and 7 percent cost of collection created operational inefficiencies and funding gaps in Customs modernisation efforts.

“The new Act addresses these challenges by consolidating “not less than 4 percent of the Free-on-Board value of imports,” designed to ensure sustainable funding for critical Customs operations and modernisation initiatives.

“This transition period will allow the Service to optimise the management of these frameworks to serve our stakeholders and the nation’s interests better.

“The Act further empowers the Service to modernise its operations through various technological innovations. Specifically, Section 28 of the NCSA 2023 authorises developing and maintaining electronic systems for information exchange between the Service, Other Government Agencies, and traders.

“The Service is already implementing several digital solutions, including the recently deployed B’Odogwu clearance system, which stakeholders are benefiting from through faster clearance times and improved transparency.

“Other innovative solutions authorised by the Act include; Single Window implementation (Section 33), Risk management systems (Section 32), Non-intrusive inspection equipment (Section 59) and Electronic data exchange facilities (Section 33(3)).

“The suspension period will allow the Service to further engage with stakeholders while ensuring proper alignment with the Act’s provisions for sustainable funding of these modernisation initiatives.

“The NCS remains committed to implementing the provisions of the Act in a manner that best serves our stakeholders while fulfilling our revenue generation and trade facilitation mandate.

“We will communicate the revised implementation timeline following the conclusion of stakeholder consultations.”

Recall that Webb Fontaine was the manager of the Customs digital platform responsible for the provision of IT and telecom infrastructure. This encompasses the delivery of the Customs Management System nationwide via the Nigeria Customs Integrated System, (NICIS II).

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