Customs: £34tn worth of customs duty relief reduces revenue as Senate probes government agencies

The Nigerian Customs Service attributed the significant drop in potential revenue to the Federal Government’s extensive import duty exemption program, and indicated that approvals granted under the Import Duty Exemption Certificate (IDEC) scheme increase to ₦34 trillion by 2025.

The disclosure was made on Monday by the Comptroller General of Customs, Bashir Adeniyi, during the Senate Committee on Finance investigative session with the revenue generating agency in Abuja.

The hearing also saw the Senate issue a stern warning to several government agencies, including the Nigerian Civil Aviation Authority (NCAA), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Industrial Training Fund (ITF) and Federal Medical Center (FMC), Jabi, for their failure to appear before the committee.

Speaking before lawmakers, Adeniyi explained that the government’s fiscal policies continue to impact the revenue profile of the Customs Service, and noted that while some policies stimulate economic growth, they also reduce the agency’s capacity to generate revenue.

According to him, although Customs consistently ranks among the highest revenue generating agencies in Nigeria, tax collections would be much higher without the massive import duty exemptions approved by the government.

Highlighting the impact of the policy, Adeniyi identified the Import Duty Exemption Certificate program, introduced in March 2020, as one of the most significant factors affecting revenues.

“IDEC approvals amount to approximately ₦34 trillion by 2025, 60 percent of which is done right by the government related to military hardware procurement, resulting in exemption from import duties due to existing security challenges in Nigeria.

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“Other government-supported relief includes imports of Compressed Natural Gas (CNG), electric and hybrid vehicles, health equipment and medical supplies, industrial machinery and manufacturing inputs, as well as a food import intervention program.”

While acknowledging the revenue impact of such relief, the Comptroller General of Customs and Excise believes that such incentives should not be evaluated based solely on lost government revenue.

He stated that the exemption from import duties also supports broader national objectives, including security, health service delivery, industrial expansion and economic development.

However, Adeniyi called for stronger oversight of the exemption regime to ensure beneficiaries meet the goals of the incentives, including lowering consumer prices, increasing local manufacturing, and expanding access to essential health services.

Earlier in his presentation, the Customs Chief revealed that the service had generated ₦4.5 trillion as of June 30, 2026, out of this year’s revenue target of ₦11.04 trillion, leaving about ₦7 trillion still to be realized before the close of the fiscal year.

The Senate hearing also brought to the fore a dispute over the transfer of operating surpluses by federal agencies.

Representing the Fiscal Responsibility Commission (FRC), Deputy Director of Monitoring and Evaluation, Bello Gulmare, alleged that the Nigerian Customs Service had outstanding liabilities of ₦8.9 billion arising from operational surpluses that had not been deposited into the Consolidated Revenue Fund in 2019.

But customs officials rejected the allegations.

The commission also claimed that the Corporate Affairs Commission (CAC) is owed an operational surplus of ₦13.9 billion covering the period 2023 to 2025.

Responding to this, the Registrar General of the Corporate Affairs Commission, Hussaini Ishaq Magaji, said the commission had made gradual payments to settle outstanding obligations.

Following the exchange, the Senate Finance Committee directed the CAC, the Commission on Fiscal Responsibility and its own secretariat to reconcile their records and determine actual outstanding obligations.

The chairman of the committee, Senator Sani Musa (Niger East), ordered that reconciliation efforts be completed within two weeks before the next meeting with the affected institutions.

He said: “A detailed report on the outcome of the planned meeting should be ready within the next two weeks for interaction with the CAC.

“Heads of institutions such as the NCAA, ITF, SMEDAN, FMC Jabi and others who are unable to physically attend today’s session must always be present at the next session or risk heavy sanctions through the application of the relevant sections of our regulations against them.”

The Senate has increased oversight of the government’s revenue-generating agencies in recent months as part of efforts to increase public revenues, enforce compliance with the Fiscal Responsibility Act and ensure timely delivery of operational surpluses to the Consolidated Revenue Fund.

Lawmakers have also stepped up scrutiny of tax incentives and import duty breaks amid concerns over their impact on Nigeria’s non-oil revenues.