• Wednesday, June 19, 2024
businessday logo


Customs should be responsible for trade facilitation, not revenue generation – Kale

Customs should be responsible for trade facilitation, not revenue generation – Kale

Yemi Kale, former statistician general of Nigeria has faulted the Federal Government for incentivising the Nigeria Customs Service (NCS) to become a revenue-generating agency rather than facilitating international trade.

Speaking at the first American Business Council (ABC) Economic update themed ‘Nigeria’s Debt Overhang and Strategies to Create Economic Growth,’ Kale said the Federal Government has created an incentive for Customs to drive revenue rather than trade by giving the service a percentage of the total annual revenue generated.

According to him, the government needs to change the wrong incentive given to Customs by giving the Service an incentive to facilitate trade rather than revenue.

“I do not believe in imposing taxes on businesses because when a government increases taxes beyond normal, the business in question would be forced to pass the additional cost on to the consumers. Rather than impose taxes on business, the government need to block revenue leakages,” Kale said.

He said the new government needs to harmonise FX rates to ensure there is clarity in the market to put the nation’s economy on the right track.

Giving insight into what manufacturers are facing in the hands of Nigeria Customs, Mokutima Ajileye, managing director of Procter and Gamble Nigeria, said that dealing with the Customs has been difficult.

Read also: Bello-Koko: NPA delivers on speedy vessel turnaround, cargo dwell time

According to her, manufacturers have situations where they import a product under a certain HS-Code only for it to get to the point of clearing at the port, the Customs will say that is the wrong HS-Code.

“Then, the product will be held at the port while the importer tries to resolve the HS-Code issues but at the end of the day, the manufacturer will be forced to pay demurrage and rent to the shipping company and terminal operators,” she explained.

She said that such development only ends up putting the manufacturing sector under a lot of pressure, adding the issue of poor power supply also put the manufacturers under pressure.

She said policy inconsistency is largely affecting the growth of the manufacturing sector.

She said the government needs to start incentivising the manufacturing sector in areas of power because diesel is really killing the manufacturing sector unless a company is fortunate to have the plant situated along the gas line.

She called on the Federal Government to make the FX rates predictable to enable manufacturers and other businesses to plan.

Dapo Olagunju, managing director of JP Morgan Nigeria, said Nigeria’s annual import is about $56 billion and based on the HS-Code, the average Customs duty rate should be about 15 percent, which should give roughly N8 trillion.

However, he said, Nigeria Customs declared the largest revenue which was about N2.2 trillion