‘Customs squeezing importers with imposition of 25% penalty on DN, increased exchange rate to meet revenue target’

Clearing agents operating at the nation’s ports have continued to express worry over the arbitrary increase in exchange rate on imported goods and the imposition of 25 percent penalty on Debit Notes (DN) by the Nigeria Customs Service (NCS).

Recall that the Central Bank of Nigeria (CBN) had in September increased the exchange rate used to calculate import duties and levies from 409//$ to 422.3/$ resulting in a 3.5 percent increase in tariff payable by importers.

The agents said while the hike has led to an increase in cost of clearance of goods, Customs is all smiles as it has continued to witness an increase in revenue collection.

Speaking on the development in a chat with Maritime Today Online, a chieftain of the Nigerian Licensed Customs Agents (ANLCA) Prince Segun Oduntan, said apart from the high exchange rate, the imposition of 25 percent penalty on Debit Notes (DN) on any infraction committed is also another factor responsible for the increase in Customs revenue collection.

Oduntan, who accused the Service of placing so much priority on meeting revenue targets set by the government instead of trade facilitation, said setting target for Customs is destroying the nation’s economy because it is the final consumers who pays for all the cost arising from the pressure on Customs at the end of the day.

“If Customs say they are meeting their target, I and you know that the 25 percent that they (Customs) give to people on Debit Note alone for those that have infractions is a lot of money.  So, they are really squeezing us. Especially those who do not know their left from right. Once there is an infraction, there is a penalty and that penalty is not suitable, it is 25 percent, which is even more than the duty on the cargo itself.

“If Customs issue 10 DN alone in a day, it is more than 30 duties paid on a cargo because you have Strike Force giving DN, you have FOU and Valuation all giving DN. All they are interested in is revenue generation. Your DN can be N700,000 but your penalty can be over N1million.

“Before now, Customs don’t issue DN indiscriminately but now the issuance of DN and penalty is what is making them meet their target.

“So, the practitioners who do not know or who are not compliant are really paying through their nose and the overall effect is on the importer which in turn is borne by the final consumer.

“Increase in exchange rate is also another factor. At the initial stage, there is no availability of forex and when you have it, it is high. So, Customs is really squeezing us all in a bid to meet revenue target.

“The CG wants to impress the Presidency; the officers too want to impress the CG so that is what is happening.  The Area Controllers don’t sleep.  You need to see them when their revenue collection is down. They are always up and doing to ensure they meet their target while they care less about trade facilitation. It is only God that can help us,” he said.

Oduntan also expressed concern over the number of Customs units involved in cargo clearance at the ports noting that there’s need to streamline their operations to hasten cargo clearance.

“There are a lot of overlapping functions which are causing delays in cargo clearance. We can streamline all these things and it will still work the same way we want it to work.

“When a PAAR is jerked up, the different Customs units alert it. On one cargo, you can have about four to five persons alerting it. Where is the fast cargo clearance we’ve always talked about? Where is the trade facilitation? When you go to advanced countries, even in Ghana, you don’t get to see anybody at the port and yet there is no revenue leakage,” he said.

He, however, noted that Customs alone cannot be blamed for the delays agents suffer in cargo clearance, adding that, “The system we have in place at the port is also a contributing factor causing delay because it is not a function of one agency. Clearance procedure is just a line and once one line is caught off, it affects the whole line so it is not just Customs.”

On the level of compliance by clearing agents, Oduntan said about 70 to 80 percent clearing agents operating at the nation’s port are now trade compliant.

He said, “We have three types of agents- the non-compliant ones, the ones that want to be compliant but due to one thing or the other, they fall victim to being not compliant and the compliant ones.

“The non-compliant agents are not there again. If you don’t know this work, you will sit somewhere. It is not about someone who wants to learn work. It has gone beyond that.  You have to go to school and learn. It is a professional job worldwide and we are competing favourably so why won’t you want to be compliant? It will be stupid of anybody if you are to pay 70 million for a cargo and you go and pay 40 million and the cargo is intercepted and you still end up paying the shortfall of 30million and a penalty of over 20million. So, we too are wise now. But you still see people falling prey because they don’t know the job.

“So, most agents are very compliant now. The only thing Customs has not done is to call us to say they want to give us award for our contribution to revenue generation because we are the drivers. They have done it before under the late Comptroller General of Customs, Dikko Abdullahi. Then they used to recognize some outstanding agents. These are things to encourage people to be more compliant. I hope tomorrow will come and another Comptroller General will see to that yearning.”