The Nigeria Customs Service (NCS) generated N1.34 trillion in the first quarter (Q1) of 2024 and conceded N318 billion to exemptions, waivers, and concessions granted to companies in the same period.
The Comptroller General of Customs, Adewale Adeniyi, disclosed this while presenting the agency’s quarterly report when he appeared before the House of Representatives Committee on Finance, monitoring the quarterly performance of revenue-generating agencies on Thursday.
Adeniyi also disclosed that its operatives made 478 seizures amounting to N1.9 trillion between January and March this year.
The committee’s deputy chairman, Hon. Saudi Abdullahi, reasoned that customs would have generated more income for Nigeria’s consolidated revenue fund in the first quarter without the waivers and concessions arrangements.
Adeniyi said that with a projected revenue target of N1.269 billion for the first quarter of 2024, the NCS exceeded the revenue targets by N77 billion.
While noting that the agency has a revenue target of 5.079 trillion for the year 2024, he said: “The monthly expected average revenue target stood at N423,255,822,173.79, and as shown below, the
collection for January recorded a shortfall of 7.66 per cent on the target, while February denoted an excess of 6.37 per cent, and the month of March equally represented a positive variance of 19.71 per
cent of its respective monthly estimates.
“Aggregatory, within the first quarter of 2024, with the total projected revenue of N1,269,767,466,521.38, the sum of N1,347,705,251,658.31 was collected, which recorded a significant improvement of 6.14 per cent higher than the periodic target.”
The Customs Boss said the Service’s contribution to the annual revenue target as at March 31, 2024, stood at 26.53 per cent, adding that the trade balance was positive at an advantage of 84.58 per cent
“It is also very important to highlight the activities that cover the Tax Expenditure, which relates to revenue conceded due to Exemptions, Concessions, and grants of any kind, either vide extant provisions as spelt out in Schedule 2 of the Common External Tariff.
“Cumulatively, the sum of N318,212,274,095.41 was conceded within the first quarter of 2024, and this represented 93.61 per cent of the total of N1,347,705,251,658.31 collected during the period under
review”, he added.
Adeniyi also expressed concern over the smuggling of Premium Motor Spirit meant for the Nigerian market to neighbouring countries, saying activities of cross-border smugglers, who divert PMS to neighbouring countries, have made Nigerians not to enjoy the benefits of subsidy removal.
“In terms of fuel, the smuggling of PMS is not allowing us to reap the full benefits of the removal of fuel subsidy, and we know how critical this is to the government. Our study has shown that there are places in our country where the smuggling of PMS is left unchecked. In the next few
days, I will be briefing Nigerians on the initial results of these operations, which will help us to know the amount we are losing to the smuggling of PMS,” he said.
The Comptroller General also said the service was not responsible for granting custom duties waivers and concessions to companies, adding that sometimes it is the president’s prerogative to determine such beneficiaries.
“Last year, we had to concede over 45 per cent of revenue that we generated to exemptions and concessions, there was no doubt about. We, as customs, are concerned and looking for a balance sheet for how we manage the exemptions. Let me put it on record that those exceptions are not only normally granted by the Nigerian Custom service.
“Some of them are granted by Mr. President in excise of power and delegated to the minister of finance where the Import Duty Exemption Certificate are transmitted to the NCS. But the minister has been very upfront in expressing his concerns about our huge numbers in 2023, and he has minced no words to say that this has to be addressed in 2024.”
The customs boss noted that the suspension of the excise policy on carbonated drinks, single-used plastics, telecommunications, and others vide the 2024 fiscal policy measures imposed drastic effort on the expected revenue from excise within the period under consideration.
The Committee’s Deputy Chairman, Abdullahi, urged the NCS to do more and generate more revenue, saying the service can raise its target of N5 trillion to N6 trillion.
He said: “I must encourage you to do more. I can see a man that knows his worth. But you can do well. You said your target is five trillion, but you can make it six trillion, and the whole country will celebrate you.
“I know you have done well with your revenue, but the question is, are we guided by cost- the cost-benefit principle when it comes to granting waivers and confessions? This is because we think despite the high turnover rate, imagine having the amount granted to these concessions compared to what you have generated. We will have around N1.5 trillion. I think we need to look inward and meticulously address this issue of waivers. If we must grant waivers, there be huge benefits for the country.
“Our problem is revenue generation, not borrowing. I want even to see a situation where Nigeria borrow two times what we are doing, but as long as we can generate more revenue, that shouldn’t be a problem.”
