By Kauthar Anumba-Khaleel, Abuja
The House of Representatives has mandated its committee on customs and excise to investigate the handling of import duty revenues, waivers and bonds on import duties collected by the Nigeria Customs Service (NCS) from 2010 to date.
This is as it asked the committee to investigate the abuse of import duty waivers granted by the federal ministry of finance and its effects on the economy; and identify the companies or individuals that have refused to redeem the bonds even after clearing their imports, and report back in 90 days.
The resolution followed the adoption of a motion sponsored by Hon. James Abiodun Faleke and 14 other lawmakers Wednesday.
In his lead debate, Faleke noted that amongst other things, the Nigeria Customs Service is mandated, to collect duties on all goods imported into Nigeria except those that were granted waivers and are on the prohibited list.
He also noted that the NCS 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 under payment of duties in billions of Naira.
“Aware that the Ministry of Finance 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;
The lawmaker informed the House that some importers, most times, issue bank and/or insurance bonds to Nigeria Customs Service in lieu of duty payments to enable the importers clear the imported goods immediately and thereafter 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.
He was 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 collections by the Nigeria Customs Service.
According to him, if those leakages are blocked and the perpetrators punished, Nigeria’s revenue base will increase and there may not be any need to source for funds of any type to fund infrastructural development in the country.
The committee will also 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 revenues due to the Federal Government but were not paid.
In a related development, the House directed its 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 when other service providers did so in December, 2013.
It also 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 utilize its ICT Infrastructure towards conforming to the World Customs Organization standard.
The decision sequels a motion by Hon. Jerry Alagbaoso wherein he 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.
Alagbaoso also noted 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 1 December, 2013, Webb Fontaine Nigeria Limited never did for some curious reasons.
“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;
“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.
“Webb Fontaine is being monitored from abroad, especially now that it still has some perks of ICT infrastructure relationship with 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”, he said.
According to him, 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.