Smuggling, import decline threaten customs’ N1.1 trillion revenue target

The Nigeria Customs Service (NCS) may not meet its N1.1trillion revenue target for 2017 as smuggling continues at the nation’s points of entry. The Guardian learnt that the customs failed to meet its 2016 revenue target due to a high level of smuggling and reduction in the volume of import. The agency had set a target of N1 trillion, but generated N898 billion as revenue (including Value Added Tax) last year.

The failure of the customs, one of the crucial revenue-generating agencies for government, to meet its target will mean less money for government to execute its projects and programmes to develop the country and take it out of the current recession.

More than this, it underscores the depth of inefficiency that has come to define port operations in Nigeria, a situation that has forced many importers to migrate their businesses to neighbouring ports of Benin Republic and Togo.

Recently, the Comptroller-General of Customs, Hameed Ali, set another target of N1.1 trillion for 2017, hoping that his team would work strictly in compliance with extant laws to enable it to achieve the goal. Ali directed all the area controllers to ensure strict compliance with extant laws to achieve its revenue target.

He said the area controllers must either “shape up or ship out” as there is no place for complacency in the customs that plays the crucial role of
revenue collection and border security. In a statement, Ali declared 2017 as a year of training and re-training, adding that “ignorance will not be an excuse for any officer as there will be refresher courses for them in batches this year.”

The comptroller-general charged customs area controllers to step up supervisory roles for their subordinates; ensure tighter border security, block revenue leakages, punish erring officers, promptly reward hard work and facilitate robust stakeholder engagement for mutual understanding, among others.

But experts in the industry say the target may be a mirage again this year, if proper measures are not put in place to combat the rising cases of smuggling.

A customs officer who preferred anonymity said the target might not be realistic going by the circumstances surrounding importation which has reduced drastically. He also complained about the high level of smuggling around the borders. “Setting target is good, I commend the CG for that, but we need thorough work to meet that target,” he said.

The National President of the Association of Nigerian Licensed Customs Agents (ANLCA), Olayiwola Shittu, described the target as “anticipatory, not realistic.”

In an interview with The Guardian, Shittu said: “That is what they did last year, and they did not meet the target. They cannot meet it. Are people going to steal cargoes? It appears they are optimistic; they are waiting for the dollar to fall and naira to appreciate so that more people can import. It is an anticipatory target, as far as I am concerned, it is unrealistic.

“There is no magic on the issue of target, you cannot get target and get trade facilitation. We only hope that officers will not cash on it and be giving frivolous bills on imported cargoes. That is the only challenge that we have as customs agents, because everywhere you go now, they will tell you we have a target to meet.

“What we want is for customs to use transaction value in charging, this is in line with the global General Agreement on Tariffs and Trade (GATT). But now that they are talking of target and they will start imposing bills on people, it appears all that government wants is money, they are not looking at trade facilitation,” he said.

The customs spokesman, Federal Operations Unit (FOU), Jerry Attah said the unit was determined to combat smuggling in the country, although it is not a revenue-generating unit.

“FOU is not part of the target because its operations are based on anti-smuggling. We are not for revenue generation. However, we always make some interventions. What we have is to reduce smuggling to the barest minimum and enhance trade facilitation,” he said.

The FOU seized 1,870 50kg bags of different brands of foreign parboiled rice, and 43 kegs of 25 litres foreign vegetable oil, alleged to be contrabands from Sango market in Ogun State last week.

Attah attributed the failure to achieve the 2016 target to the difficulty in accessing foreign exchange and ban on importation of 41 items by the Central Bank of Nigeria (CBN).

According to him, the service was given a target of N937 billion as revenue in 2016. “The strict insistence of the comptroller general on the application of instant laws enabled the service to generate a total that is inclusive of VAT of N898 billion. If VAT is removed, duty collection only is N720 billion, our performance represents 76.90 per cent. Hopefully we will do better in 2017,’’ Attah said.