Amid Headwinds, Customs Records Historic N3.20tn Revenue in 2023

•Adeniyi: FG granted N2tn tax concessions, service missed target by N478bn, vows to meet, surpass N5.079tn mark in 2024

•Hints on bottlenecks, calls for transparent tax waiver regime 

•Confiscates contraband worth N16.05 billion

James Emejo in Abuja

The Comptroller-General of Customs (CGC), Mr. Bashir Adeniyi, yesterday, said the Nigeria Customs Service (NCS) generated an unprecedented N3.20 trillion revenue in 2023.

The performance represented a 21.4 per cent increase compared to N2.64 trillion recorded in the preceding year, but fell short of the N3.68 trillion target for the year by N478 billion in the review period.

Speaking at a media briefing in Abuja, Adeniyi, however, pointed out that the growth aligned with the Customs’ consistent upward trajectory as evidenced by a 17.88 per cent revenue increase in 2022, adding that the, “consecutive expansion in revenue underscores the service’s sustained efforts in optimising revenue collection for the federal government.”

He said the year was marked by operational challenges including lower transaction volumes, compliance issues, inadequate infrastructure, and capacity gaps – compounded by delays in policy implementation and socio-political factors.

Among other things, he added that the anxiety associated with a major election year, prolonged cash crunch linked with the Naira redesign programme of the Central Bank of Nigeria (CBN) which temporarily impacted purchasing power and economic activities, further hampered revenue performance last year.

He said the transition of power to the President Bola Tinubu-led administration which brought about a new policy direction, including the removal of fuel subsidy, the floating of the exchange rate, and the closure of the country’s Northern borders with Niger Republic, further added to the complexity of the operating environment for the service.

The CGC said these challenges led to a revenue shortfall of N532 billion compared to the N1.84 trillion target in the first half of 2023.

Nonetheless, Adeniyi, noted that following his appointment as CGC in July last year, as well as merit-based reconstitution of the customs management team, there was a significant shift that enabled the service to exceed monthly revenue targets by 6.71 per cent for the first time in 2023.

He said improved revenue collection in the second half of the year played a crucial role in significantly reducing the revenue shortfall by 10 per cent from N532 billion to N478 billion by year-end.

According to him, monthly revenue collection for the latter half of the year averaged N332.9 billion, a substantial increase from the initial N201.7 billion recorded in H1 2023.

He specifically attributed the positive trend to strategic measures, including the immediate establishment of a Revenue Review Recovery Team and the dissolution of existing Strike Force Teams, and streamlining enforcement under the Federal Operations Unit (FOU).

He also blamed the deficit in revenue collection on deliberate government initiatives and incentives designed to foster the growth of various sectors within the economy.

Specifically, he said the government approved concessions worth N2 trillion, incorporating select dutiable items under the new tariff heading Chapter 99.

Adeniyi said, “This policy shift resulted in the exemption of duty payments on certain dutiable goods, previously falling within a duty range of five per cent to 10 per cent.

“The overarching objective of these granted waivers and concessions was twofold – to stimulate development across diverse economic sectors and to bolster the nation’s overall peace and security.”

Adeniyi, however, called for a review of the tax waiver system to make it more transparent and for the benefit of the economy.

He also said the Service sustained its vigorous campaign against smuggling and illicit trade, which resulted in 3,806 seizures with a duty paid value totaling N16.05 billion.

He said the confiscations included a diverse array of contraband, namely arms and ammunition, artifacts and antiquities, illicit drugs, expired food produce, and endangered species of flora and fauna.

Adeniyi said customs also achieved 52 convictions, with 11 specifically linked to the illicit trade in animal/wildlife.

He said, “Noteworthy is the international acknowledgment garnered for the Service’s efforts in combating this illicit trade in animal/wildlife. This steadfast commitment underscores the NCS’s dedication to protecting Nigerian

society, maintaining a resolute stance against smugglers, and diligently dismantling their operations.”

However, the CGC said the service remained committed to facilitating the achievement of the newly set revenue target of N5.079 trillion which is aligned with the government’s economic objectives for 2024.

He said, “This target signifies the government’s confidence in the NCS’s capabilities and underscores the service’s important role in contributing to the nation’s fiscal wellbeing.

“The strategic initiatives detailed above, alongside other operational reforms, are anticipated to play a crucial role in achieving this revenue goal.

“As the NCS addresses the challenges and opportunities in 2024, the service is steadfast in its commitment to implementing these strategies and exploring practical approaches to meet the heightened revenue target. This commitment aligns with the NCS’s ongoing dedication to efficiency, excellence, and positive contributions to Nigeria’s economic landscape.”

Notwithstanding its revenue aspirations for the year, Adeniyi said the service was conscious of the topical trends and issues that will impact its operations within the fiscal year.

He said Nigeria’s pivotal leadership role in the African Continental Free Trade Area (AfCFTA) was underscored by its distinction as the largest and most populous country in Africa, boasting a significant industrial presence.

He said, “Notably, Lagos alone contributes substantially, accounting for 80 per cent of Africa’s Cultural Services export. The inception of the Guided Trade Initiative (GTI) on October 7, 2022, saw over 30 countries participating, with Customs assuming a leading role in the implementation of the AfCFTA.

“As the driving force behind AfCFTA execution, Customs holds a central position in shaping government trade policy. The NCS is resolutely committed to actively contributing and playing a pivotal role in aligning its operations with the dynamic facets of AfCFTA.”

Among other things, he said the NCS remained resolute in addressing border management challenges, balancing security concerns with trade facilitation, adding that the zero-tolerance approach towards smuggling, especially of petroleum products out of the country, will be rigorously enforced.