The Nigeria Customs Service has disclosed that government-approved import duty waivers and tax concessions cost it an estimated ₦34.54tn in projected revenue in 2025, even as it surpassed its annual revenue target by 10.24 per cent.
The Comptroller-General of Customs, Adewale Adeniyi, made the disclosure on Monday while defending the Service’s 2025 budget performance and presenting its 2026 budget proposal before the House of Representatives Committee on Customs and Excise.
Adeniyi said Customs generated ₦7.28tn between January and December 2025, exceeding its revenue target of ₦6.58tn by ₦696bn.
He, however, attributed the huge revenue loss to extensive import duty exemptions and fiscal incentives approved by the Federal Government.
According to him, imports valued at ₦34.54tn benefited from waivers and exemptions in 2025, with petroleum products accounting for 56.40 per cent of the total, while military imports made up 40.52 per cent.
He also listed healthcare waivers, tax concessions on pharmaceutical products and duty exemptions granted under the Presidential Compressed Natural Gas initiative for CNG-powered and electric vehicles among measures that reduced Customs earnings.
Adeniyi noted that excise duty on telecommunications services remained suspended throughout 2025, while proposed revenue measures, including the green tax, were yet to be implemented.
He said, “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 added that geopolitical tensions in the Middle East disrupted global supply chains during the last quarter of 2025, affecting imports of strategic commodities, particularly wheat.
Budget shortfall
On expenditure, the Customs boss disclosed that although the Service secured an approved budget of ₦1.13tn for 2025, only ₦808.86bn was available for implementation.
He attributed the funding gap to the transition from the old seven per cent Cost of Collection arrangement to the new four per cent Free-on-Board Cost of Collection framework introduced under the Nigeria Customs Service Act.
According to him, the Service operated under the previous funding model until August 2025 before migrating to the new structure.
“We relied on the seven per cent Cost of Collection until August before commencing implementation of the four per cent FOB arrangement,” he said.
Adeniyi commended the National Assembly for supporting the transition, saying the legislature played a key role in ensuring the implementation of the new funding model.
During the budget defence, lawmakers sought clarification over discrepancies between the approved budget, actual funds released and expenditure figures presented by the Service.
Responding, Adeniyi explained that the approved budget was based on projected funding under the four per cent FOB arrangement, while actual implementation reflected the delayed transition from the previous system.
He also clarified that concessionaire payments, previously handled through the Comprehensive Import Supervision Scheme account, are now paid directly by Customs under the provisions of the new Act.
Following the explanations, the committee approved the Service’s request to proceed with the presentation of its 2026 budget proposal.
₦11.07tn target
For the 2026 fiscal year, Customs is targeting ₦11.07tn in revenue.
The projection comprises ₦5.54tn from 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.
Adeniyi said the Service would pursue the target through expanded automation, intelligence-led enforcement, post-clearance audits and improved trade facilitation.
He identified the Unified Customs Information System (B’Odogwu) as the agency’s flagship platform for automating customs operations and strengthening revenue collection.
The Customs boss also said reforms implemented in collaboration with the International Monetary Fund and the World Customs Organization had improved post-clearance audit operations, enabling the agency to recover revenue through real-time system audits.
Tariff cuts may slow collections
Adeniyi acknowledged that recent reductions in import duties on vehicles could moderate revenue growth despite expected gains from new excise measures.
He disclosed 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.
Responding to questions from lawmakers, he said it was too early to determine the impact of the policy, which took effect on May 1, 2026.
He stressed that while Customs provides technical advice on trade trends and revenue implications, fiscal policy decisions remain the responsibility of the Federal Ministry of Finance.
Personnel, infrastructure
The Service proposed ₦421.70bn for personnel costs, ₦307.77bn for overheads and ₦565.93bn for capital expenditure in its 2026 budget.
Adeniyi said Customs currently has 15,969 personnel, with 3,927 new recruits expected before the end of the year.
He added that the capital allocation would fund ongoing projects, operational equipment, ICT infrastructure and existing contractual obligations.
