In 2023, the National Assembly passed into law the Nigeria Customs Service Act, bringing fresh revenue and anti-smuggling impetus to the operations of the nation’s Customs activities. However, in 2024, four tax reform Bills were transmitted to the National Assembly, with sections and sub-sections that might confuse Customs operations, writes TOLA ADENUBI.
President Bola Ahmed Tinubu last year October transmitted four tax reform bills to the national assembly. The bills are the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill (NTA), the Nigeria Revenue Service Establishment Bill (NRS), and the Joint Revenue Board Establishment Bill (JRB). Together, these bills are expected to overhaul tax administration and revenue generation in Nigeria.
While the Nigeria Customs Act (NCS), which was recently passed into law in 2023 by the National Assembly is not one of the laws that will be revoked once the Nigeria Tax Bill becomes law, the contradictions and duplications of functions stated in the Nigeria Revenue Service Establishment Bill (NRS), Joint Revenue Board Establishment Bill (JRB) and Nigeria Tax Administration Bill (NTA) as they relate with the NCS Act 2023 may breed confusion in Nigeria’s Customs processes.
Nigeria Revenue Service Establishment Bill (NRS)
Section 1 of the NRS establishment Bill says: “The objective of this Act is to provide for a legal, institutional and regulatory framework for the administration of taxes and revenue under any law made by the National Assembly and to account for such taxes and revenue collected.”
This invariably means that the Assessment Notices/Declaration Forms on imported and exported goods generated by Customs’ NICIS II & B’Odogwu platforms, may be shifted to NRS.
If that aspect of Customs mandate is automatically removed from under Customs operations, what happens to the advancement that has been put into the development of this applications, particularly the B’Odogwu application and the funding that went into the design of the software and the infrastructure installed to sustain it.
Again, section 4 of the NRS Bill provides another omnibus provision, as it gives the proposed NRS oversight functions over all taxes and levies, especially subsection 1, (a, b, e, I, m) and Subsection 3, (b) which states that: “deploying appropriate technology or digital platforms to automate any of its tax administration processes or in carrying out any of its functions under this Act.”
This no doubt is a wastage of investments already made in establishing B’Odogwu platform and rendering the ICT-Modernisation Unit of NCS ineffective or useless, if the Bill is passed without proper amendment.
Section 42 of the NRS Bill defines tax to include any Duty and revenue accruable to the Federal Government. The section states that: “person includes an individual or a body of individuals, a company or body of companies, any incorporated or unincorporated body of persons,” thereby subsuming everything that is provided for under Sections 3 & 4 of the NCS Act 2023 which says: “The provisions of this Act shall apply to all matters connected with the management and administration of Customs and Excise.”
Section 4 of the Customs Act 2023 states the Functions of the Service as thus: (a) administer, direct, manage and enforce the provisions of this Act and the customs and excise laws; (b) collect and account for revenue from Customs duties, excise duties, charges, fees and special assessments as may be assigned to it by the Government; (c) administer trade and fiscal policies of the Government as it relates to this Act; (d) promote trade facilitation in line with international conventions and agreements as it relates to customs administration; (e) prevent smuggling, customs fraud and all other violations under this Act; (f ) carry out all border enforcement and regulatory activities required by law in collaboration with relevant agencies.
If section 42 of the NRS Bill is passed into law, will it replace the NCS Act? Who takes over the above-mentioned responsibilities of the Customs?
Joint Revenue Board Establishment Bill (JRB)
Section 40 Sub-section 1 of the Joint Revenue Board (JRB) Bill have jurisdictional conflict issues with the Customs Act 2023: the JRB law states that: “The Office of the Tax Ombud shall have the powers necessary or expedient for the performance of its functions under this Act, including power to- (a) serve as an independent and impartial arbiter to review and resolve complaints relating to tax, levy, regulatory fee and charges, Customs duty or Excise matters.”
This is no doubt in conflict with the jurisdiction of Nigeria Customs Service that raises Assessments, levies, surcharges, etc on behalf of the Federal Government of Nigeria, as spelt out in its NCS Act 2023.
Will JRB or NRS carry out these responsibilities without initial hesitations on the technicalities and directions to take? It is imperative that the National Assembly expunge these provisions from the NRS & JRB Bills 2024, and leave it intact, as provided for by the NCS Act 2023 to avoid a conflicting situation that won’t afford businesses breathing space.
Nigeria Tax Administration Bill (NTA)
Sections 78, 79 of the Nigeria Tax Administration (NTA) Bill 2024 are clearly NCS duties enshrined in the NCS Act 2023 at Part IX, Sections 67-82. The provisions in the NTA Bill is clearly abrogating Customs functions under Part IX. So, if the Bill is passed as it is, without harmonization, it is likely to brew inter-agency rivalry which leads to ineffectiveness and inefficiency.
Section 141 (1) of the NTA Bill states: “This Act shall take precedence over any other laws with regards to the administration, assessment, collection, accounting and enforcement of taxes and levies due to the relevant tiers of Government and if the provisions of any other law are inconsistent with the provisions of this Act, the provisions of this Act shall prevail and the provisions of that other law shall, to the extent of the inconsistency, be void.”
This provision in the Nigeria Tax Administration Bill is like sounding a death knell on the Nigeria Customs Service.
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Section 143 of the NTA Bill states: “advance ruling means any ruling issued by the tax authority in respect of any disputed or controversial tax matter to the taxpayers in accordance with provision of this Act, the Nigeria Tax Act or any other tax law enacted by the National Assembly; or any written opinion or decision issued to a taxpayer by the relevant tax authority on a transaction, proposed transaction or any tax matter with a view to providing direction or clarification in accordance with the provisions of this Act.”
This is also in direct conflict with the NCS Act 2023 at Section 24. Advance Ruling (AR) is a World Customs Organization (WCO) instrument to facilitate trade across international borders.
Maritime stakeholders have continued to argue that the Bills should encourage collaboration, operational integration between Nigeria Customs Service and the tax authorities.
Speaking with the Nigerian Tribune exclusively on the matter, a Chieftain of the Association of Nigerian Licensed Customs Agents (ANLCA), Mr. Joe Adumaza Sanni stated that, “As a member-state of the World Customs Organization (WCO), Customs Administrations play a vital role in enhancing the efficiency and effectiveness of Customs operations, contributing to national development goals like revenue collection, trade facilitation, and national security.
“Huge resources have been expended in getting the NCS Act 2023 passed and has been in existence for just less than 2 years, and now challenges are coming due to policy changes. That doesn’t speak well of government’s sincerity on the issue.”
