FG stops Customs’ 7% deduction from federation revenue
The Federal Government has ended the Nigerian Customs Service’s seven per cent cost-of-collection deduction from Federation Account revenues. This change means the Customs Service is no longer part of the direct allocation of shared federal earnings. Abdullahi Maiwada, the agency’s spokesperson, confirmed the new funding model, which now relies on a statutory charge based on import values. The move is expected to impact the distribution of federal revenues among the three tiers of government.
TLDR
- The Nigerian Customs Service no longer receives a seven per cent cost-of-collection deduction from the Federation Account.
- The new funding model, introduced by the Nigerian Customs Service Act, 2023, is based on at least four per cent of the Free-on-Board value of imports.
- Abdullahi Maiwada confirmed that Customs now operates independently of the monthly FAAC distribution process.
- Other agencies, like the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Revenue Service, continue to receive their statutory deductions.
- State finance commissioners have called for periodic reviews of cost-of-collection arrangements to ensure more revenue flows to the Federation Account.
