Government fiscal policy has mandated the Nigeria Customs Service (NCS) to impose a14 percent duty on vessels imported into the country by Nigerian ship owners, which subsequently raises the cost of importing vessels into the country.
The policy also enabled Customs to persistently grant waivers to foreign-owned vessels in line with the provisions of Coastal and Inland Shipping Act (Cabotage).
In view of this, Dera Nnadi, deputy controller of Customs in charge of Enforcement at the Tin-Can Island Port command, who spoke to newsmen in Lagos recently, explained why Customs cannot grant zero duty on imported vessels in Nigeria as being requested by the indigenous ship owners.
Nnadi, who reacted to issues raised by shipping-industry stakeholders in Lagos recently, said that it was not in the place of Customs to grant such a request as the service only implements government policies and not formulate them.
“Besides implementing policies, we take feedback from stakeholders and we give them to government. We also take government policies, interpret them and share with stakeholders. Some of those feedbacks, sometimes, may not be very complimentary,” he added.
According to him, stakeholders could not understand why it should be cheaper to bring in vessels on temporary importation basis whereas much more was being paid as duty on vessels imported by indigenous ship owners.
“The truth is that there is a little misconception about waivers. It is not totally true that when you are bringing vessel under TI (Temporary Importation) it is almost free. No, I think that if they calculate the duty, the importer would have paid on that item assuming it was brought in for home use. The importer is supposed to deposit that same amount in a bank as bond and then present the bond to the Nigeria Customs Service and on that basis, you are granted waiver,” Nnadi said.
Explaining further, he said: “The waiver is for a period ranging from six months to two years renewable. However, it cannot be renewed for more than twice. So, if you are granted waiver for first two years, you come back for renewal, of course, after the second two years, you are expected to re-export and when you are coming back, you pass through the rigours of obtaining the documentation process again.
On stakeholders’ request that there should be complete waiver on duty on commercial vessels, Nnadi said that it is for government to do and not Customs as in the case of commercial airlines that do not pay duty.
He added that just like private airlines pay duty because they are considered luxury, Yatches also pay more as duty for being luxury.
On the allegation that Customs may not want the duty on imported vessels to go as it helps boost its annual revenue target, Nnadi said that target setting is a function of government and the money made by Customs is paid into Treasure Single Account (TSA).
“Customs operates on a budget and does not have the prerogative to spend the money collected. Most of the money collected by Customs also goes back to government for development of other sectors of the economy. The question is that if all the money has been collected as tax from commercial vessels, can we also divert part of that money to developing the shipping sector?” he questioned.
Amaka Anagor-Ewuzie
