Senate begins investigation into alleged N4trn revenue leakage in Customs

Senate Committee on Customs, Excise and Tariff, has commenced investigation into an alleged over N4 trillion revenue leakage in the Nigeria Customs Service (NCS) between 2006 and 2016.
Chairman of the Committee, Senator Hope Uzodinma, made this known on Sunday in Abuja.
He said that the committee would stop at nothing in recovering the money, which was lost to lapses and various infractions.
He pointed out that preliminary investigation by the committee revealed that the over N4 trillion revenue leakage was due to abuse and non implementation of Form M (Foreign Exchange forms).
He added that wrong classification of cargo under HS Code (Harmonised System Codes), non screening of cargoes coming into Nigeria and lack of adequate ICT infrastructure for revenue collection, were equally responsible.
Uzodinma further explained that cancellation of pre-arrival assessment reports and abandonment of single goods declaration were equally responsible for the leakage.
“The Senate Committee on Customs has condemned the inability of the technical committee on the implementation of comprehensive import supervision scheme to ensure that provisions of Import Control Management Act are followed to the latter.
“The committee frowns at the quantum of revenue losses and it will stop at nothing in ensuring that those involved in this ugly act return all recoverable monies with them.
“The committee also frowns at the level of collusion and corruption within the Customs Service.
“At the end of our current investigation, all these will become a thing of the past and customs revenue will be enhanced while non oil revenue will be improved upon.
“What we are investigating is not money spent. It is the leakages.
“For instance, I am supposed to pay XYZ amount of duty, I will abandon the documentation, go get fake documents, collude with customs, pay maybe a fraction of it and carry my goods. With that, the true import circle is not closed.
“Another instance is that assessment is abandoned or I fill the form M for example with a pro forma invoice, apply for foreign exchange in Central Bank, XYZ amount of money is allocated to me, money moves in but no goods shipped.
“ I will then go get fake documents, collude with customs and then retire the allocation,’’ he said.
The lawmaker decried that this sharp practice, including round tripping and false declarations, had over time led to increase in the exchange rate.
He said that in most cases, the amount of money spent was not commensurate with the number of goods being imported.
According to him, the committee has started questioning the companies and banks indicted in this act.
“We will not mention the companies involved because we are also very careful of the integrity and public perception of some of these companies, because some of them are in the Stock Market.
“We will be diplomatic in carrying out this investigation.
“This is to the extent that little or no damage will be done to the integrity and image of such companies provided that government revenues in their hands will be recovered,’’ he said.
On concerns that little or nothing was often heard of outcome of investigations carried out by the Senate, Uzodinma said the Upper Chamber was sometimes faced with constitutional limitations.
However, he assured that the current investigation would be brought to a logical conclusion because it had to do with the economy and revenue loss.
He stressed the need to get the country out of recession, saying that the committee would get the necessary support to conclude investigation and recover the necessary funds.
“ I am sure that the executive arm of government will be willing and interested to ensure that the monies that are littered here and there are recovered.”
The chairman said a public hearing would be held as part of the investigation process.
On the committee’s investigation into non-repatriation of proceeds from oil and non-oil products by Joint Venture companies, the lawmaker said report on the investigation had been concluded and it would be laid in plenary on Tuesday.
On the retrospective policy on payment of customs duties on old vehicles, the lawmaker expressed concern over such anti-people policy.
He added that the service was overstepping its bounds by making policies rather than implementing policies made by the Ministry of Finance, which is the supervisory ministry.
According to him, the power to make policies for the customs service is vested in the Ministry of Finance.
“Having gone through the legislations and books available to my office as it has to do with the administration of the customs service, it only implements policies made by the Ministry of Finance.
“So, it sounds very strange to hear that Customs get up and says they are making a policy.
“That is what I am yet to understand and there is no way to fathom that before the law.
“The referral is already before us. I was waiting for him to appear before the senate before we commence a full blown investigation into some of those issues that have been referred to us.
“Concerning the suspended policy on payment of customs duties on old vehicles, the committee will continue to interface with the service to ensure that the policy is cancelled not suspended.
“The whole idea is about governance and governance is about the people and nobody is licenced or entitled to talk about the people more than the elected representatives.
“So in my view there is no hullaballoo. We will discuss with them and wise reasoning will prevail,’’ he said.