Customs exempts manufacturers, government projects from 4% FOB levy

The Nigeria Customs Service (NCS) has announced exemptions from its controversial four percent Free on Board (FOB) import charge to ease pressure on manufacturers and other critical sectors of the economy.

Adeniyi Adewale, the Comptroller General of the NCS, on Friday in Lagos at a stakeholders engagement session with the Manufacturers Association of Nigeria (MAN), announced that manufacturers bringing in raw materials, machines, and spare parts will not have to pay the levy, provided they fall under chapters 98 and 99 of Nigeria’s Customs Tariff.

These chapters are special sections of the tariff book that the government uses to grant import concessions or waivers for industries considered important to the economy.

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He said they are “reserved lists” where companies approved by the government enjoy easier import conditions.

Affected firms have been advised to apply for pre-release of consignments to avoid demurrage costs.

Meanwhile, manufacturers not yet captured under the tariff chapters will also be onboarded in a fast-tracked process led by the federal ministry of finance, the NCS, and the Manufacturers Association of Nigeria (MAN), and payments already made by firms awaiting onboarding will be retained as credit for future customs transactions, the Customs DG said.

Other exemptions include “government projects with import duty exemptions certificates, goods imported for humanitarian, life saving and other related purposes, commercial airlines’ spare parts, and beneficiaries of the Presidential Initiative for unlocking Healthcare value chain.”

Francis Meshioye, president of the Manufacturers Association of Nigeria (MAN), said the agreement reached with Customs at the stakeholders’ engagement session aligns with MAN’s objectives to ensure that its members thrive despite the condition of the economy.

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He said that it is also in alignment with the objectives of federal government under the Federal Ministry of Finance, particularly with the Nigeria Customs Service.

“I believe this will really strengthen our relationship; it is going to really make our relationship better off,” he said, noting that it is a win-win situation for both the Nigerian Customs and manufacturers.

The FOB charge, passed as law, is calculated based on the value of imported goods, including transportation costs up to the port of loading.

The NCS revived the controversial tariff in early August to replace the one per cent Comprehensive Import Supervision Scheme (CISS) and the seven percent charge on its duties.

These final resolutions were approved by Wale Edun, the minister of finance who had instructed the suspension of the FOB charge last week after mounting pressure from manufacturers and other importers.

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Customs met manufacturers to seek a fresh start and address underlying issues. “The exchanges were open, frank and cordial,” the CGC said.

Apart from the four percent charge on FOB, manufacturers flagged multiple checkpoints and multiple alerts in the clearance system as a threat to trade facilitation. The B’Odogwu platform glitches were also brought up as a concern.

On its part, Customs briefed manufacturers on some of its initiatives to facilitate trade including the “Economic Operator Programme (AEO), advance ruling, and time release study.