Director-General, Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, has expressed concern over reported plans by the Nigeria Customs Service (NCS) to secretly re-introduce the four per cent Free-on-Board (FoB) levy.  
  
Warning Customs and the Federal Government against the development, he said it would have an inevitable catastrophic impact on the manufacturing sector in particular, the business community and the people of Nigeria in general.
  
Describing the development as unfortunate and retrogressive, he lamented that the extensive stakeholder engagement promised manufacturers had not been inclusive and, quite importantly, had refused to take into consideration the affected stakeholders, which, to a large extent, are manufacturers.
  
He noted that the overwhelming opinion of the stakeholder engagement would have dissuaded Customs from implementing the levy and proffered a more progressive and sustainable option for increased revenue for the NCS and government. If implemented, he said it would be an additional burden to the one per cent Comprehensive Import Supervision Scheme (CISS) fee being paid by manufacturers already, at a time that all government agencies should be seeking ways to de-escalate the cost of doing business in Nigeria, as is done in other climes and economies.
  
“It is equally worrisome that this is coming at a time when there is still a looming danger of the unwarranted 15 per cent hike in port charges; our members are struggling with the astronomical increase in the effective import duty calculation rate and contending with an unprecedented rise in the cost of energy.”
  
“We had expected that the NCS would ultimately rescind the move to introduce the unpopular and ill-timed levy. We didn’t expect to see/hear that the levy would be reintroduced, even before the promised wide consultation with MAN and other private sector organisations.”

We warn that the decision should be put away before it worsens and degenerates into an economic quagmire,” he said.
  
According to Ajayi-Kadir, what is needed at this time is the prioritisation of improved trade facilitation that will mitigate the prevailing constraints militating against the optimum performance of the productive sector.
  
He posited that, given the prevailing economic downturn, the imposition of the levy would only exacerbate the spiralling cost of production and ultimately compound the dissipating disposable income of the average Nigerian.
   
The MAN boss added: “We had expected that, in line with the prevailing economic reform agenda of the government that seeks to streamline fiscal policies and engender a progressive and business-friendly tax regime, we should be experiencing a demonstrated aversion to the introduction of fresh fees and levies by government agencies and institutions. This is the time for all government institutions to recommit to the reduction of the cost of doing business; expanding the scope of businesses and incentivising new entrants in the face of high business mortality. 
  
“Again, we reiterate the unassailable reasons why the levy should not be implemented. The already high cost of importation due to the prevailing exchange rate used in calculating the Customs duty will further escalate. This is evident in the cost, which had earlier jumped by over 118 per cent from N2.07 trillion in the first nine months of 2023 to N4.53 trillion in the same period of 2024.”

the guardian