Manufacturers call for suspension of Customs’ 4% Free-on-Board import levy 

Naijaonpoint reported that the NCS last week, announced the implementation of a 4 percent charge on the Free On-Board value of imports in line with the provisions of the Nigeria Customs Service Act (NCSA) 2023.

“The FOB charge, which is calculated based on the value of imported goods, including the cost of goods and transportation expenses incurred up to the port of loading, is essential to driving the effective operation of the service,” Abdullahi Maiwada, the spokesperson of the service said in a statement.

In a statement released on Tuesday and signed by the Director General of MAN, Dr Segun Ajayi-Kadir, the association condemned the “sudden and inopportune introduction and implementation of the 4% FOB Levy.”

MAN said it is an “unfortunate addition” to the 1% Comprehensive Import Supervision Scheme (CISS) fee being paid by its members.

The association said it is concerned that the government through the NCS is introducing new levies at a time when it should be helping local businesses reduce the cost of doing business.

Naijaonpoint reported that the NCS is also proposing a 15% hike in port charges. MAN says this will drive up inflation and severely derail the little recovery gains of the manufacturing sector.

“We had expected that the NCS would give priority to trade facilitation in view of the prevailing economic downturn, rather than exacerbating the spiraling cost of production,” the statement noted.

“This is in view of its potential wider implications on the economy in the form of low productivity, increased unemployment rate, and consequent higher propensity to criminal activities and insecurity, not to mention the negative impact on the disposable income of the overall economic wellbeing of the over 220 million Nigerians,” it added.

Ajayi-Kadir further noted that the government and its agencies should be promoting a business-friendly tax regime rather than imposing new tariffs.

“It is equally worrisome that this is coming at a time when there is a planned 15% hike in port charges and industries are struggling with the astronomical increase in the effective import duty calculations rate.  

“All government institutions should recommit to the reduction of the cost of doing business, expanding the scope of businesses and broadening the nation’s revenue base.”  

MAN rejected the implementation of the FOB levy and demanded its suspension on the following premises: