Customs exceeded 2025 revenue target despite waivers – CG

The Nigeria Customs Service on Monday said it surpassed its 2025 revenue target by 10.24 per cent, generating ₦7.28tn between January and December, despite a series of government-approved tax waivers and fiscal incentives aimed at stimulating economic growth.

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

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

Adeniyi, however, clarified that an error had appeared in the executive summary of the budget document submitted to lawmakers.

“The correct revenue generated from January to December 2025 is ₦7.28tn. This represents a positive variance of 10.24 per cent above our annual target of ₦6.58tn,” he said.

The Customs boss said the feat was achieved despite significant revenue losses arising from fiscal policies introduced by the Federal Government to support critical sectors of the economy.

According to him, excise duty on telecommunications services remained suspended throughout 2025, while other revenue measures, including the proposed green tax, were yet to be implemented.

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

Import duty exemption certificates, Adeniyi added, accounted for the largest revenue shortfall. “In 2025, a total of about ₦34.53tn worth of imports received various exemptions and waivers,” Adeniyi said, noting that the affected imports included military equipment and other strategic items approved under government intervention programmes.

He further explained that the limited number of products currently subject to excise duty also constrained revenue generation, while geopolitical tensions in the Middle East disrupted global supply chains during the last quarter of 2025, affecting imports of strategic commodities, particularly wheat.

Lost N34.54tn revenue in 2025

Meanwhile, the NCS recorded a loss of N34.54tn in projected revenue owing to a huge volume of trade covered by Import Duty Exemption Certificates and VAT Order.

According to Adeniyi, “A total of N34.54tn worth of imports, made up of 56.40% petroleum products, 40.52%  military imports.”

Budget implementation

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.

He attributed the shortfall 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 introduced under the Nigeria Customs Service Act.

He said the NCS operated under the previous funding model until August 2025 before migrating to the new framework.

“You might wish to recollect that there were two funding portfolios for the Nigeria Customs Service. We relied on the seven per cent Cost of Collection until August before commencing implementation of the four per cent FOB arrangement,” he said.

He commended the National Assembly for supporting the transition, saying, “We want to put it on record that the support we received from the National Assembly was very instrumental, and we thank you for this,” he added.

The available funds, he said, were utilised for personnel costs, overhead expenditure, capital projects and concessionaire obligations.

Lawmakers seek clarification

During the 2025 budget defence, members of the House Committee queried discrepancies between the approved budget, actual funds received and expenditure figures presented by the Customs management.

Abia lawmaker, Alex  Ikwechegh, sought clarification on concessionaire fees reflected in the expenditure profile.

Responding, Adeniyi explained that the approved budget was based on projected funding under the new four per cent FOB arrangement, whereas actual implementation reflected the delayed transition from the old funding structure.

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“The projection for 2025 was predicated on the funding system under the four per cent FOB Cost of Collection. But from January to July, we still relied on the seven per cent Cost of Collection until August, when implementation commenced. This explains the variance between what was approved and what was actually available,” he said.

On concessionaire payments, the CG explained that responsibilities previously handled through the Comprehensive Import Supervision Scheme account now fall directly under the Nigeria Customs Service following reforms introduced by the new Act.

“Under the new Act, the responsibility for payment of concessionaire fees was transferred to the Nigeria Customs Service, and these fees are now paid from the four per cent FOB Cost of Collection. 25 per cent is reserved to meet those obligations,” he explained.

Satisfied with the explanations, the committee directed the Service to proceed with the presentation of its 2026 budget proposal.

₦11.07tn revenue target for 2026

For the 2026 fiscal year, NCS is targeting ₦11.07tn in revenue. The projection comprises ₦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.

To achieve the target, Adeniyi said the Service would deepen automation, strengthen post-clearance audit, expand intelligence-led enforcement and enhance trade facilitation.

Central to the strategy, he said, is the Unified Customs Information System popularly known as B’Odogwu, a robust automated platform that harnesses all Customs procedures.

“The Unified Customs Management System is now up and running very well. We believe it provides the platform for robust revenue collection,” he said.

He also disclosed that reforms undertaken in collaboration with the International Monetary Fund and the World Customs Organisation had significantly strengthened post-clearance audit operations.

“Through that, we are able to carry out real-time system audits and continue to recover revenue on a daily basis,” he stated.

According to him, the Authorised Economic Operator Programme and the Advance Ruling Programme are now fully operational and are expected to improve compliance while facilitating legitimate trade.

Tariff reductions may affect revenue

Adeniyi acknowledged that although new excise measures expected under the 2026 fiscal policy could boost collections, recently approved tariff reductions on imported vehicles may moderate revenue growth.

Responding to lawmakers’ questions, he 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.

The chairman of the House Committee on Customs, Leke Abejide, urged the NCS to publicise the reductions to ensure Nigerians were aware of the government’s policy.

When asked why many importers still preferred neighbouring ports despite the lower tariffs, Adeniyi said it was too early to assess the impact of the policy.

“This is a new policy. It takes an average of about 90 days before we begin to see its full effects. The implementation commenced on May 1, 2026, and we believe the impact will become more evident over time,” he explained.

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.

“Implementation of fiscal policy measures is outside the mandate of the Nigeria Customs Service. We periodically review developments, make observations and forward recommendations through the Ministry of Finance. Government then takes the final decision,” he said.

Personnel, infrastructure to dominate 2026 spending

Customs proposed ₦421.70bn for personnel costs, ₦307.77bn for overheads and ₦565.93bn for capital expenditure in 2026.

Adeniyi disclosed that the Service currently has 15,969 personnel, with 3,927 new recruits expected to join before the end of the year.

He said personnel costs would cover salaries, pensions, health insurance and other statutory obligations, while capital spending would focus on completing ongoing projects, acquiring operational equipment, expanding ICT infrastructure and meeting existing contractual commitments.

The NCS has consistently posted record revenue collections over the past three years, driven by sweeping customs modernisation reforms, tighter enforcement, automation of cargo clearance processes and exchange rate adjustments affecting import duties.

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