The House of Representatives on Wednesday resolved to probe allegations bordering on abuse of import duty waivers granted by Federal Ministry of Finance and its effects on the economy.
The lawmakers, during the debate sponsored by James Faleke (APC-Lagos) and 14 others, frowned at the failure of some companies and individuals involved in importation for refusing to redeem the bonds issued by banks/insurance companies after clearing their goods at various ports.
In his lead debate, Faleke observed that the Nigeria Customs Service was mandated, among other things, to collect duties on all goods imported into Nigeria, except those that were granted waivers and are on the prohibited list.
Faleke further noted that Nigeria Customs Service customarily issues Pre-Arrival Assessment Reports which are used to assess duties payable on imported goods but the reports are sometimes compromised by importers, thereby leading to underpayment of duties in billions of naira.
“The Ministry of Finance a gave series of duty waivers to companies, in line with the policy of government to assist businesses, but in most cases, the waivers were used to import goods not listed on the approval, thereby depriving the government of the needed revenues.
“Some importers, most times, issue bank and/or insurance bonds to the Nigeria Customs Service in lieu of duty payments, to enable the importers clear the imported goods immediately and thereafter are expected to redeem the Bonds by paying the appropriate duty rates, but information reveals that the Bonds are either partially redeemed or never redeemed at all.
“The House is further aware that the inability of the Federal Government to finance the 2017 budget and meet its other obligations made the Ministry of Finance to source for funds from local banks and the Capital Market, through “sukuk” etc., meanwhile there are leakages in revenue collection by the Nigeria Customs Service,” he alleged.
Faleke argued that if those leakages are blocked and the perpetrators punished, Nigeria’s revenue base would increase and there may not be any need to source for funds of any type to fund infrastructural development in the country.
To this end the House mandated the Committee on Customs and Excise to determine the nature and extent of abuse of the Customs Pre-Arrival Assessment Reports (PAAR) by importers and officials of the Customs Service, in order to recover the unpaid revenues due to the Federal Government.
According to the House, the Committee is to investigate the abuse of import duty waivers granted by the Federal Ministry of Finance and its effects on the economy.
The Committee was also mandated to identify the companies or individuals that have refused to redeem the Bonds, even after clearing their imports, and report back within 90 days for further legislative action.
In a related development, the House also mandated the Committee on Customs to investigate the operational activities of Webb Fontaine Nigeria Limited in the Nigeria Customs Service Information and Communications Technology (ICT) Infrastructure between 2013 and 2017 as well as the violation of its Automated System for Customs Data (ASYCUDA) time-line agreement, rules of engagement and delay in the handover of its services to the Nigeria Customs Service.
The resolution was passed, following the adoption of a motion sponsored by Jerry Alagbaso and 10 others.
In his lead debate, Algbaso noted that Webb Fontaine Nigeria Limited is one of the Service Providers for the import and export trade facilitation within Nigeria Customs Service ICT Infrastructure.
He recalled that while other Service Providers like Cotecna, SGS and Global Scan which operated in the various seaports, airports and borders, handed over their operations to the Nigeria Customs Service on 1st December, 2013, Webb Fontaine Nigeria Limited never did.
“The House is aware that Webb Fontaine has transferred almost all its shares to Hong Kong and is left with one share, as stated on the deed of transfer of shares Forms 2006 which raises the question of whose economic interest that is being protected by the transfer of nearly all its shares abroad, more so, when Hong Kong is not under Nigeria’s jurisdiction.
“The House is concerned that the transfer of the shares to Hong Kong implies that when Webb Fontaine wins a huge service contract in Nigeria, a major chunk of the profit will be transferred offshore to Webb Fontaine Hong Kong.
“The House is cognisant that Webb Fontaine is being monitored from abroad, especially now that it still has some perks of ICT infrastructure relationship with the Nigeria Customs Service in the area of application of software, as far as Pre-Arrival Assessment Report (PAAR) and trade facilitations are concerned in Nigeria,” the lawmaker noted.
He maintained that Webb Fontaine appears to be losing interest in Nigeria and consequently does not deliver its services, having transferred majority of its shares abroad, which calls for a re-examination of the Time-Line Agreement, Rules of Engagement, Schedule of Payment of its services and Corporate Economic and Social Responsibilities so far in Nigeria.
To this end, the House urged the Federal Ministry of Finance to look into its agreement with Webb Fontaine, with a view to exploring the option of handing it over to the Nigeria Customs Service as already done by other Service Providers and also set up a Compliance Monitoring Team that will liaise with the Nigeria Customs Service to further utilise its ICT Infrastructure towards conforming to the World Customs Organisation standard.
While ruling, Yussuff Lasun, the Deputy Speaker, who presided over the plenary session, mandated the Committee on Customs and Excise to investigate the operational activities in the Nigeria Customs Service ICT Infrastructure between 2013-2017, violation of its ASYCUDA Time-Line Agreement, Rules of Engagement and the delay in handing over to Nigeria Customs Service and report back in six weeks for further legislative action.
