A Review of the Nigerian Energy Industry

Why NCS missed N1.2tn revenue target in 2014

12 January 2014, Lagos – Fresh facts have emerged as to why the Nigeria Customs Service (NCS) could not meet its revenue target of N1.2 trillion in 2014.

The federal government had in 2013, through a memo issued by the Federal Ministry of Finance, set a revenue target of N1.2 trillion last year for the NCS.

The revenue target was aimed at boosting federal government revenue generation every fiscal year. The Service often strives to meet the revenue target and surpasses it in some cases.  However, it sometimes fails meet the target as was the case last year.
Impeccable sources close to the Customs High Command, NCS Headquarters, Abuja explained that one of the reasons why the last year’s target could not be achieved was due to the initial hiccup encountered by the NCS in the management of Pre-Arrival Assessment Report (PAAR).

PAAR replaced Risk Assessment Report (RAR) following the cancellation of the seven years contract given to the three scanner service providers (SSPs) by the federal government.

The source told THISDAY that the initial opposition to the implementation of PAAR over a year ago, contributed to hinder the service from attaining its set goals and objectives, including meeting the revenue target for 2014.

“When we took over PAAR, there were a lot of challenges associated with the successful implementation of the scheme. This is normal with every new initiative. You have to grapple with a lot of things to ensure that it works. There was also a lot of opposition from the former scanner service providers. Many importers and freight forwarders who were apprehensive of losing what they were benefitting from the old order were also kicked against PAAR. We were being bombarded left and right. If not for the strong will of the Comptroller General of Customs and his management team backed fully by President Goodluck Jonathan, the service would have abandoned the scheme.”

“There were also backlog of RAR left by the former three scanner service providers that Customs needed to clear with a lot of leakages here and there. Naturally, human do not like change. They always resist it. PAAR was not an exception. If not for these initial hiccups, we would not only meet the target but also surpass it”, the source added.

From its monthly summary report, the NCS generated not less than N977.09 billion as revenue in 2014. The amount generated by the Customs High Command was however short of the N1.2 trillion revenue target given to it for last year.

The monthly summary of its revenue generation in 2014 prepared by the NCS and obtained by THISDAY showed that the revenue was generated from sundry sources.

These include import and excise duties, levies and other fees charged by the service in line with the statutory roles and responsibilities.

The revenue figure also showed an increase of N143.79 billion over the N833.4 billion NCS collected in 2013. The figure represented about 15 per cent increase in the amount collected by NCS.

In the period, N586.91 billion out of the amount collected by NCS was remitted to the federation account while N390.18 was remitted to non-federation account.
A breakdown of the report showed that N511.55 billion was collect from import; N8.59 billion from import duty while N39.76 was collected from fees.

It also showed that N203.37 billion was collected from levies; N186.80 billion from Value Added Tax (VAT) and the Common External Tariff (CET) levy accounted for N24.61 billion.

A quarterly breakdown showed that N197.82 billion was collected in the first quarter; N265.81billion in second quarter, while N249.29 billion and N264.05 billion were collected in third and fourth quarters respectively.

The comparison of the quarterly collection during the year revealed that the second quarter accounted for highest, while the first quarter recorded the lowest collection for the year.

Giving an insight into why the service improved in its revenue generation in 2014 compared to 2013, NCS Deputy Comptroller-General, Trade and Tariff, Mr. Adewuyi Akinade explained that the service ensured that all avenues for revenue leakages were blocked.

The DCG also stated that the system audit put in place by the service had helped to enhance compliance by traders.

According to him, the service also blocked all the potential areas of revenue leakages last year.

– This Day

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