The Federal Government has suspended the 4% Free on Board (FOB) charge recently imposed on imported goods by the Nigeria Customs Service.
The directive, which takes effect immediately, was communicated on Monday via a letter signed by Permanent Secretary, Special Duties, R. O. Omachi, Federal Ministry of Finance.
The move follows consultations with industry stakeholders, trade experts, and government officials, who raised concerns that the levy could increase costs for importers, reduce trade competitiveness, and create inflationary pressure in the economy.
“Pursuant to the powers vested upon the Honourable Minister of Finance and the Coordinating Minister of the Economy under Part III, Section 12 of the Nigeria Customs Service Act, 2023 as the Chairman of the Board of Nigeria Customs Services, I write to direct the immediate suspension of the implementation of the collection of 4% Free on Board (FOB) recently levied by the Nigeria Customs Service on all imported goods.
“Following extensive consultations with industry stakeholders, trade experts, and relevant government officials, it has become clear that the implementation of the 4% FOB charge poses significant challenges to the Nigerian trade facilitation, environment, and economic stability,” the statement read in part.
The statement further noted that the suspension provides an opportunity for a comprehensive review of the levy’s framework and economic impact, ensuring that any future revenue measures are fair, efficient, and supportive of both business stability and national economic growth.
Customs officials were also instructed to strictly comply with the directive while the Ministry engages stakeholders to develop a more balanced and effective revenue collection system.
What you should know
- The levy was designed to streamline import charges, enhance transparency, and boost revenue collection, with the idea that importers would pay a single 4% fee upfront.
- However, Nairametrics’ earlier reporting revealed that importers said the 4% FOB levy was being collected in addition to the existing 7% cost of collection, 1% processing fee, and other charges, rather than replacing them as intended, further increasing the financial burden.
The combined effect of the 4% FOB levy, 7% cost of collection, and 1% processing fee increased clearing costs at Nigerian ports, with importers warning that these additional burdens were being passed on to consumers through higher prices, especially for vehicles.
Following these developments and consultations with stakeholders, the Federal Government suspended the 4% FOB levy to allow for a review of its framework and assess its impact on trade competitiveness, business operations, and the wider economy.
