Revenue collections by customs surpassed projected 2025 goals, waiver concessions notwithstanding, says Commissioner-General

The Nigeria Customs Service has announced that it exceeded its 2025 revenue target by 10.24 per cent, generating ₦7.28tn between January and December, despite various government-approved tax waivers and fiscal incentives aimed at stimulating economic growth.

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This feat was disclosed by the Comptroller-General of Customs, Adewale Adeniyi, while defending the agency’s 2025 budget performance and presenting its 2026 budget proposal before the House of Representatives Committee on Customs and Excise.

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According to Adeniyi, the Service surpassed its annual revenue target of ₦6.58tn by ₦696bn, attributing the performance to sustained reforms in revenue administration, technology deployment, and trade facilitation.

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However, Adeniyi clarified that an error had appeared in the executive summary of the budget document submitted to lawmakers, stating that the correct revenue generated from January to December 2025 is indeed ₦7.28tn, representing a 10.24 per cent positive variance above the annual target.

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The Customs boss noted that this achievement was made despite significant revenue losses arising from fiscal policies introduced by the Federal Government to support critical sectors of the economy, including the suspension of excise duty on telecommunications services throughout 2025.

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Other revenue measures that reduced Customs earnings included healthcare waivers, tax concessions on pharmaceutical products, and duty exemptions granted under the Presidential Compressed Natural Gas initiative covering CNG-powered and electric vehicles.

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Adeniyi also listed import duty exemption certificates as a major contributor to revenue shortfalls, with a total of about ₦34.53tn worth of imports receiving various exemptions and waivers in 2025, including military equipment and strategic items approved under government intervention programmes.

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The limited number of products subject to excise duty and geopolitical tensions in the Middle East, which disrupted global supply chains during the last quarter of 2025, also constrained revenue generation, particularly for imports of strategic commodities like wheat.

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The NCS recorded a loss of ₦34.54tn in projected revenue due to a huge volume of trade covered by Import Duty Exemption Certificates and VAT Order, with affected imports including 56.40% petroleum products and 40.52% military imports.

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On expenditure, the Comptroller-General disclosed that although the Service secured an approved budget of ₦1.13tn for the 2025 fiscal year, only ₦808.86bn was available for implementation due to the transition from the old seven per cent Cost of Collection funding arrangement to the four per cent Free-on-Board Cost of Collection mechanism.

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Adeniyi attributed the shortfall to the delayed migration to the new funding framework, which occurred in August 2025, and commended the National Assembly for supporting the transition.

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The available funds were utilised for personnel costs, overhead expenditure, capital projects, and concessionaire obligations, with the Customs management providing explanations for discrepancies between the approved budget, actual funds received, and expenditure figures during the 2025 budget defence.

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Lawmakers, including Abia lawmaker Alex Ikwechegh, sought clarification on concessionaire fees reflected in the expenditure profile, which Adeniyi explained were now paid from the four per cent FOB Cost of Collection, with 25 per cent reserved to meet those obligations.

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The committee directed the Service to proceed with the presentation of its 2026 budget proposal, which targets ₦11.07tn in revenue, comprising ₦5.54tn from the federation accounts, ₦1.49tn from non-federation accounts, ₦2.27tn from import Value Added Tax, and ₦1.26tn from the four per cent FOB Cost of Collection.

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To achieve the target, Adeniyi said the Service would deepen automation, strengthen post-clearance audit, expand intelligence-led enforcement, and enhance trade facilitation, leveraging the Unified Customs Information System, known as B’Odogwu.

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Reforms undertaken in collaboration with the International Monetary Fund and the World Customs Organisation have significantly strengthened post-clearance audit operations, enabling real-time system audits and daily revenue recovery.

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The Authorised Economic Operator Programme and the Advance Ruling Programme are now fully operational, expected to improve compliance while facilitating legitimate trade, although tariff reductions on imported vehicles may moderate revenue growth.

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Adeniyi confirmed that import duty on used vehicles had been reduced from 15 per cent to five per cent, while duty on brand-new vehicles was cut from 20 per cent to 10 per cent, and the chairman of the House Committee on Customs, Leke Abejide, urged the NCS to publicise the reductions.

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When asked about the impact of the policy, Adeniyi said it was too early to assess, as implementation commenced on May 1, 2026, and the full effects would become evident over time, typically within 90 days.

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He added that while Customs provides technical advice on trade trends and revenue implications, decisions on fiscal policy remain the responsibility of the Federal Ministry of Finance, which takes the final decision after receiving recommendations through the Ministry of Finance.

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For 2026, the NCS has proposed ₦421.70bn for personnel costs, ₦307.77bn for overheads, and ₦565.93bn for capital expenditure, with personnel costs covering salaries, pensions, health insurance, and other statutory obligations for the Service’s 15,969 personnel, including 3,927 new recruits expected to join before the end of the year.

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Capital spending will focus on completing ongoing projects, acquiring operational equipment, expanding ICT infrastructure, and meeting existing contractual commitments, as the NCS continues to post record revenue collections driven by customs modernisation reforms, tighter enforcement, automation of cargo clearance processes, and exchange rate adjustments affecting import duties.

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The Federal Government has increasingly relied on targeted duty waivers and tax concessions to cushion inflation, encourage investment in strategic sectors, and lower the cost of doing business, creating a delicate balance between revenue generation and broader economic policy objectives.