Manufacturers raise concerns over proposed 4% charge on value of goods by Customs

MANUFACTURERS Association of Nigeria (MAN) has expressed apprehensions over the reported plans by the Nigeria Customs Service (NCS) to reintroduce the 4 per cent Free-on-Board (FOB) levy.

According to MAN, this development would negatively impact the manufacturing sector, the business community, and Nigerians at large.

Sunday Tribune understands that the FOB levy is a charge imposed on the value of goods at the point of export or import, calculated based on the free-on-board value of the shipment.

In other words, it is a percentage of the total value of the goods being imported or exported, excluding costs such as insurance and freight.

The proposed levy would mean that importers and manufacturers would have to pay 4 percent of the value of their goods as a levy, adding to their costs.

Reacting to the development, MAN’s Director General, Segun Ajayi-Kadir, described the proposed levy as “unfortunate and retrogressive.”

He noted that the extensive stakeholder engagement promised by the NCS has not been inclusive and has not taken into consideration the affected stakeholders, particularly manufacturers.

According to Ajayi-Kadir, the overwhelming opinion of stakeholders would have dissuaded the service from implementing the levy and instead to proffer a more progressive and sustainable option for increased revenue for the NCS and government.

Ajayi-Kadir further emphasised that the levy would be an additional burden to the one percent Comprehensive Import Supervision Scheme (CISS) fee already being paid by manufacturers.

He argued that this would increase the cost of doing business in Nigeria, which is contrary to the efforts of government agencies to de-escalate costs and promote economic growth.

MAN’s concerns highlight the potential impact of the proposed levy on the manufacturing sector and the broader economy.

The association’s call for a more inclusive stakeholder engagement and a reconsideration of the proposed levy underscores the need for policymakers to carefully consider the implications of such policies on the business community and the economy.

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