James Emejo in Abuja
A renowned tax and customs expert, Okey Ibeke, has cautioned that the proposed tax reform bills before the National Assembly have the potential to undermine the Nigeria Customs Service (NCS) specialised operations, which remained crucial for the country’s revenue drive.
He stressed that the NCS’ duties which are highly technical and extend far beyond revenue collection could be eroded unless relevant concerns relating to the bills are addressed.
Ibeke’s remarks came against the backdrop of a recent public hearing on tax reform bills organised by the House of Representatives Special Committee on Tax Reform Bills.
He warned that passing the bills without necessary adjustments could render the NCS redundant, a situation that could negatively impact revenue collection for development projects.
He said although the Comptroller-General of the Customs, Mr. Adewale Adeniyi, had said the tax reform aligned with President Bola Tinubu’s commitment to an efficient tax system, certain aspects of the bills could hamper the service’s ability to perform its core functions.
Ibeke, specifically expressed concerns that designated revenue agencies may lack the technical expertise, specialised workforce, and continuous training required to handle customs’ operations.
He noted that these agencies might struggle to detect undervalued or misclassified goods, potentially leading to the acceptance of inaccurate importer declarations.
“Customs work is more than just collecting revenue. It involves classifying cargo, understanding tariff classifications, and conducting customs valuations. Without the expertise to classify cargo and determine the applicable duty rates, there will be significant challenges. Only well-trained customs personnel can effectively perform these functions,” Ibeke said.
He stressed the importance of applying Rules of Origin (RoO), which are essential for determining the national source of products, as well as critical for assessing the value of imports, calculating appropriate revenue, and identifying fraudulent practices – tasks that general tax administration systems are ill-equipped to handle.
According to him, the NCS has already made significant strides in modernising its operations through its Trade Modernisation Project (TMP), stressing that the deployment of the ‘B Odogwu’ software, for instance, had contributed to increased revenue collection and positioned the service to surpass its 2025 revenue target.
Ibeke therefore prevailed on the federal government to increase funding for the service to address revenue collection challenges rather than repealing the 2023 NCS Act, which took over eight years to pass into law.
He said, “The NCS has established infrastructure and is leveraging technology to facilitate trade. Repealing the Act would undermine these efforts and hinder progress.
“Is the federal government planning to dismantle the customs service? Will they employ customs officers to work in the new agency? Will they create offices for them within the agency? This could lead to confusion. Ultimately, the government, which aims to maximise revenue, stands to lose the most,” he said.
Ibeke argued that if the NCS was no longer responsible for revenue collection, it could result in reduced import duty collections.
He said, “Customs officers may simply approve whatever declarations importers submit, leading to significant revenue losses.”
Meanwhile, Adeniyi, during the public hearing, urged the committee to uphold the NCS’ mandate under the 2023 Act, emphasising the importance of ensuring that the final bills do not contradict the Act, thereby preserving the agency’s core functions and operational efficiency.
Stakeholders also called for a balanced approach that strengthens the country’s tax system without compromising the critical functions of the service.
The bills under consideration include the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service Establishment Bill, and Joint Revenue Board Establishment Bill.
