Breaking: Federal Government Suspends Controversial 4% FOB Levy on Imported Goods
In a major relief for importers and businesses, the Federal Government has announced the immediate suspension of the contentious 4% Free on Board (FOB) levy on imported goods. The directive, issued by the Federal Ministry of Finance, follows widespread outcry from industry stakeholders who warned that the levy would worsen inflation and harm Nigeria’s trade environment.
Why the Levy Was Introduced and Why It Caused an Uproar
The 4% FOB charge was introduced by the Nigeria Customs Service (NCS) in August as a new, unified levy. Its stated purpose was to streamline import fees and replace multiple charges, including the 7% cost of collection and the 1% processing fee under the Comprehensive Import Supervision Scheme (CISS).
The idea was to create a more efficient, transparent, and financially autonomous system for Customs, a provision enshrined in the Nigeria Customs Service Act, 2023.
However, the implementation quickly unraveled. Instead of replacing the old fees, the 4% FOB levy was being collected in addition to them. This led to a dramatic increase in clearing costs at Nigerian ports, with importers facing an unprecedented financial burden.
The Importers Association of Nigeria (IMAN) estimated the levy would add a staggering ₦4 trillion annually to freight costs, a burden that would inevitably be passed on to consumers. Businesses warned that this would lead to higher prices for everything from raw materials to vehicles, fueling the country’s already high inflation.
The Government’s Response and Way Forward
Following extensive consultations with stakeholders, the Federal Government, through the Minister of Finance, Wale Edun, has recognized the “significant challenges” the levy poses to trade and economic stability. The suspension, announced via a letter from the Permanent Secretary, R. O. Omachi, is a direct response to these concerns.
The government has stated that this suspension will provide a crucial opportunity for a comprehensive review of the levy’s framework. The goal is to develop a more balanced and effective revenue collection system that supports both national economic growth and business stability.
Customs officials have been instructed to strictly comply with the directive, ensuring that importers are no longer subjected to the charge.
This swift policy reversal demonstrates the government’s responsiveness to business concerns. It also highlights the ongoing challenge of balancing revenue generation with the need to foster a competitive and stable economic environment in Nigeria.
Join Our Social Media Channels:
WhatsApp: NaijaEyes
Facebook: NaijaEyes
Twitter: NaijaEyes
Instagram: NaijaEyes
TikTok: NaijaEyes
