What Nigeria Customs Service Should Rather Do to Generate More Revenue
The Nigeria Custom Service (NCS) has formed the habit of increasing duty on different categories of goods brought into the country at will. On different occasion, they have blamed the target imposed on them by the Federal Government of Nigeria as the reason for the increase in tariff.
Most economists and analysts have engaged themselves on whether increase in tariff will bring about increase in revenue or not.
On a general note, I do not think increasing tariff for importers will bring about increase in revenue in our country; in fact, I think it will only bring about loss of revenue.
Here are my reasons;
- Nigeria as a country is large and surrounded by smaller countries with favourable custom duty fees. If our duty fees are not favourable to these importers, I think they will look for alternatives instead of staying off business. Most importers from Nigeria resort to using these nearby countries to clear their goods and then look for ways to bring in these goods into the country (Considering our numerous porous borders).
- The Nigerian Custom Service is very unfriendly to Importers and always seeks for opportunities to exploit/frustrate them. No business thrives in a presumed hostile environment. From a personal survey conducted by TheTotalEntrepreneurs.com on the ease of starting business in Nigeria, one of the major fears of startups is the fear of how to get raw materials/goods from outside the country without having one issue or the other clearing them upon arrival. One of the entrepreneurs interviewed specifically said he is afraid of importing anything into the country because, he is not sure by the time the goods land on the Nigerian seaport, a new policy would not have been created making the goods illegal, country band or clearing rates hiked.
- The neighbouring countries understand the value of Nigerian Importers and daily making it easier for them to clear their goods at a cheap duty rate, faster clearing time and friendly custom policies.
If 80% importers from Nigeria start utilising the countries seaport to bring in their goods especially cars and other food items at a reduced fee, the service will be generating lots of revenue surpassing even their target.
But how can this be?
What Nigeria Customs Service Should Rather Do to Generate More Revenue;
- The service should consider reducing duty rates and it should be commensurate with industry standard charges. This will encourage importers to follow due process in bringing in their goods into the country and as such generate revenue for the service.
- The officers should be ready to explain to importers beforehand what they require to clear every category of goods.
- The service should consider a faster clearing time. Technologies abound to make their work easier. Importers should not be made to wait for ages to have their goods cleared.
If these little measures are put in place, I strongly believe the Nigerian Custom Service will have no need chasing importers around the porous borders to discourage them from such alternatives. Also, any importer whose goods is seized for lack of payment of appropriate duties should be penalized by paying double of the initial duty instead of seizing the goods and selling to their (Officers) cronies at a more cheaper rate without any duty being paid eventually.
I am also against the auctioning of goods imported by another individual without their consent. There should be a law that will only allow owners of seized goods to pay double of the actual duty fee and regain possession of their goods.
Our dear readers are welcome to contribute on this topic. Cheers