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NCS explains N532bn revenue shortfall in 2023

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By Bisi LAWAL

 

The Comptroller-General of the Nigeria Customs Service (NCS), Bashir Adewale Adeniyi has given reasons behind the revenue shortfall of N532 billion recorded in the first half of 2023 despite 21.4 per cent increase from the preceding year’s revenue target.

The CGC said the NCS was able to achieve the remarkable feat despite the challenges within the operational environment.

Comptroller-General Adewale who spoke on Wednesday, reaffirmed the Customs’ determination to meet the newly set revenue target of N5.079 trillion for the fiscal year 2024.

Giving insight into what happened in 2023, the Comptroller-General of Customs, Adewale stated, “In the fiscal year 2023, the NCS achieved a significant milestone by recording a total revenue collection of N3,206,603,417,315.47, marking a noteworthy 21.4% increase from the preceding year’s total revenue of N2,641,616,673,501.83.

“This growth aligns with the NCS’s consistent upward trajectory, as evidenced by a 17.88% revenue increase in 2022”.

He pointed out that the consecutive expansion in revenue underscores the Service’s sustained efforts in optimising revenue collection for the Federal Government and exemplifies its ability to adapt to dynamic economic conditions.

According to him, the achievement is particularly remarkable given the challenges the NCS encountered within the operational environment.

“Operational challenges such as lower transaction volumes, compliance issues, inadequate infrastructure, and capacity gaps were compounded by delays in policy implementation and socio-political factors.

“The anxiety associated with a major election year, the prolonged cash crunch linked to the introduction of higher denominations of the new Naira bills, temporarily impacted purchasing power and overall economic activities.

“The transition of power to the President Tinubu-led Administration brought about new policy direction, including the removal of fuel subsidy, the floating of the exchange rate, and the closure of Nigeria’s Northern borders with Niger Republic, adding another layer of complexity.

“These challenges led to a revenue shortfall of NGN 532 billion in the first half of the year, falling short of the projected revenue target of N1.84 trillion,” Adewale highlighted.

However, he stated that a positive transformation occurred in the later part of the year, following his appointment as the Comptroller-General in July.

“This was accompanied by a merit-based reconstitution of the management team, resulting in a significant shift that enabled the Service to exceed monthly revenue targets by 6.71% for the first time in 2023.

Monthly revenue collection for the latter half of the year averaged NGN 332.9 billion, a substantial increase from the initial N201.7 billion recorded in the first half of the year,” Adewale further explained.

He attributed the positive trend to strategic measures, which he embarked on, including the immediate establishment of a Revenue Review Recovery Team and the dissolution of existing Strike Force Teams, streamlining enforcement under the Federal Operations Unit (FOU).

It also includes strategic reassignments of Customs Area Controllers, the creation of an ideas bank, and extensive stakeholder engagements, which collectively contributed to the impressive resurgence.

The CGC noted that the improved revenue collection in the latter half of 2023 played a crucial role in significantly reducing the revenue shortfall by 10 percent, decreasing from N532 billion to N478 billion by year-end.

“This calculation is based on the government’s projected revenue collection by the Nigeria Customs Service (NCS) of NGN 3.684 trillion and the actual collection of NGN 3.206 trillion,” Adewale added.

Explaining further, he said, “Moreover, the deficit in NCS revenue collection can be ascribed to deliberate government initiatives and incentives designed to foster the growth of various sectors within the economy.

“Specifically, the government approved a concession of NGN 2 trillion, incorporating select dutiable items under the new Tariff heading Chapter 99. This policy shift resulted in the exemption of duty payments on certain dutiable goods, previously falling within a duty range of 5% to 10%.

“The overarching objective of these granted waivers and concessions was two-fold: to stimulate development across diverse economic sectors and to bolster the nation’s overall peace and security”.

The Comptroller-General of Customs stated that the NCS sustained its vigorous campaign against smuggling and illicit trade, culminating in 3,806 seizures with a Duty Paid value totalling N16, 049,023,262.

These confiscations, he noted encompassed a diverse array of contraband, including Arms and Ammunition, Artifacts and Antiquities, illicit drugs, expired food produce, and endangered species of flora and fauna.

Remarkably, the NCS achieved 52 convictions, with 11 specifically linked to the illicit trade in Animal/Wildlife.

Going forward, he highlighted that numerous strategic initiatives are poised to positively impact the Service’s performance in the coming months.

These initiatives he enumerated include the introduction of the Advanced Ruling system, aligning NCS operations with global best practices, and meeting the recommendations of the World Trade Organisation Trade Facilitation Agreement (WTO TFA).

He said in the upcoming week, the NCS is set to inaugurate an electronic auction (e-auction) platform, strategically designed to enhance transparency in the auction process.

According to him, the new revenue target of N5.079 trillion allocated to the NCS by the Federal Government in the fiscal year 2024 is in line with the government’s economic objectives, stressing that the target signifies the government’s confidence in the NCS’s capabilities and underscores the Service’s important role in contributing to the nation’s fiscal wellbeing.

The Comptroller-General of Customs stated that the strategic initiatives that he has put in place, alongside other operational reforms, are anticipated to play a crucial role in achieving the revenue goal.

In striving to actualize the set goals, he emphasised that the NCS will maintain a zero-tolerance stance towards indiscipline and non-compliance in the year 2024, and urged all officers and stakeholders to adhere strictly to established procedures and regulations as maximum cooperation is expected from every stakeholder in the customs operations.

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