E-Valuator/E-Invoicing Controversy Stakeholders Ask Finance Minister to Resign if…
Customs says 30days import clearance grace unaffected
By Eguono Odjegba
Importers, port users and stakeholders have taking a swipe at the Federal Ministry of Finance, FMOT, for allegedly sitting on the fence when its two critical agencies, the Central Bank of Nigeria, CBN, and the Nigeria Customs Service, NCS, have put the nation’s import and export trade under state of confusion, allegedly occasioned by an arbitrary action of the CBN linked to the recent introduction of E-Valuation and E-Invoicing.
This is even as some industry observers have called on the Minister of Finance, Mrs. Zainab Ahmed to quit if she is incapable of reigning in arbitrary posturing of the Governor of the CBN, Mr. Godwin Elefiele, over series of import policies he keeps foisting on the industry without consultation, in a military fashion.
One of the two new policy initiatives of the CBN, the E-Voicing has however generated dust which turned whirlwind last week, as the NCS openly debunked the CBN’s assertion that both agencies have consented to its application; a development that has since created unease in the port industry.
This is even as the NCS has cleared the air that its clarification the controversial e-invoicing has not in any way affected the 30 days grace period granted importers to secure the clearance of their vehicles, in lieu of the review of the recently introduced VIN-Valuation by the customs.
According to the NCS, the two issues are separate and should not be misconstrued in their applications, even as he reiterated that the E-Valuation system has come to stay, and urged importers, customs agents, freight forwarders and other stakeholders in the industry to utilize the grace period well.
It will be recall that NCS distanced itself from the CBN declaration that both agencies maintains a common understanding of the introduction of the the e-valuator and e-invoicing for import and export businesses.
The Customs Comptroller General, Col. Hameed Ali, Rtd, had in a statement last week said the customs maintains a functional up to date internal valuation system for both import and export, that is in tandem with the essential dynamics of valuation supported by the World Customs Organization, WCO.
He said the NCS will continue to align with the WTO Agreement on Customs Valuation, ACV, as it aims for a fair, uniform and neutral system for the valuation of goods for Customs purposes.
The statement signed by the Customs Public relations Officer, Deputy Comptroller Timi Bomodi reads in part: “It has come to our attention that there are reports, suggesting the Nigeria Customs Service (NCS) has acquiesced to the introduction of the e-valuator and e-invoicing for import and export businesses in Nigeria by Central Bank of Nigeria (CBN).
“We wish to state that this is incorrect. The Service still stands by its earlier submissions on the matter, as was clearly communicated to the House of Representatives Joint Committee on Customs and Excise, Banking and Currencies on 03 March 2022.”
While explaining that e-voicing policies of every country must at all time fit into the global trade conventions and protocols, he emphasized the following:
“They are transaction value of identical goods, the transaction value of similar goods, Deductive value method, Computed value method, and Fallback method, applied sequentially. The NCS as a government agency aligns with the WTO Agreement on Customs Valuation (ACV) as it aims for a fair, uniform and neutral system for the valuation of goods for Customs purposes.
“This conforms to commercial realities, and outlaws the use of assumed values for customs purposes. It is our view that the use of benchmarking in valuation as proposed by the CBN policy will negate the aim of the ACV and result in disputes, delays and uncertainties.”
The Customs notes that it would be further guided by the inputs of the parliament who also have a say in the matter, an engagement the customs said was yet to take place.
“The House of Representatives Joint Committee on Customs and Excise, Banking and Currencies had directed that all agencies with defined roles in the supply chain meet to harmonize procedures with particular reference to resolving the issue of value for trade purposes.
“This meeting is yet to take place, therefore there could not have been any agreement supporting the CBN initiative as reported in the news. We look forward to the robust deliberation that is expected to occur from this meeting as directed. Until then we shall continue to abide by the principles as contained in the ACV for all import/export transaction.”
Neither FMOF nor CBN has made a statement since the Customs current position, a situation stakeholders say smacks of official negligence , they also described as unhealthy for trade and the national economy.
Commenting on the development, immediate past National President of the Association of Nigeria Licensed Customs Agents, ANLCA, Prince Olayiwola Shittu said the current situation suggests that the industry is on auto pilot, with is attendant oppressive fallout on concerned players.
“It is surprising that CBN will take a position on customs operations without having a chat with the FMOF and Customs. I know CBN is under the control of the presidency, but then there is no way they could have gone into this arrangement without letting the FMOF know.”
“It is the importers and stakeholders that will suffer the consequences of governmental dispute or lack of agreement, because pressure is on Customs to go ahead with the policy, but then Customs is trying to be professional even though they are looking for ways to make more revenue, but they are still willing to follow the WCO and WTO guidelines.
“So the way it is now, we are all (import/freight forwarders) in the middle, we don’t know what will happen, and nobody is making any effort to bring them together, talking about this new policy of releasing, without talking to themselves.”
Asked if he was surprised that the federal ministry of finance which supervises both the CBN and NCS is saying nothing because perhaps, it is handicapped, since the CBN reports directly to the presidency, he said everyone is in a state of surprise.
“Should l say it is handicap, or that like the ostrich, the ministry is burying its head in the sand just to evade its responsibility? Because it is the ministry that should come out with a categorical statement on who is right or what must be done.
“But you also know that the finance ministry, let me use your word is handicap, because it is clear they can’t control the CBN. Overt time we don’t hear anything from the finance ministry, directing the CBN to do this or that, the ministry’s role has become like a rubber stamp affair.”
Shittu expressed worry certain agencies of government are in the habit of bypassing their supervising ministries, by taking directive from the presidency.
“Even the NCS don’t respect the Ministry of Finance, because they (Customs) regard themselves as being under the presidency. It is not only sad but very alarming if we are to continue like this; surprise is an understatement.”
Asked the way out of the present policy quagmire, he said the ministry of finance should be held accountable.
“The way out is to call the Ministry of Finance to account for its silence, that is what stakeholders should be doing, because it was just like when the CBN banned 41 items for example, nobody said anything and they got away with it.
“Nobody was thinking of the impact on the economy, nobody asked, ‘ah-ah, are these essential commodities or supermarket items’, nobody talked. So CBN is a god on its own, so we need to call the ministry of finance out, let the ministry explain what is happening and stop playing the ostrich.
Also commenting, a Port Harcourt based freight forwarder, Mr. Anthony Chidi Opara said the standoff is an outcome of a government that has lost direction.
“The public disagreement between the CBN and NCS, on a policy they are supposed to jointly implement is unfortunate to say the least. It is shame that government agencies responsible for the management of government foreign trade policies, are disagreeing publicly on a policy within their portfolios.
“The public disagreement is a testimony to the lack of synergy, and non existence of synergy between government agencies in Nigeria usually results in shoddy implementations of government policies, especially as it concerns foreign trade.”
On whether the disagreement will impact on the 30days grace period granted stakeholder stakeholders to clear the backlog of vehicles occasioned by their week long protest, which was later resolved with a commitment to carry out a review to perfect the system, Customs PRO, Timi Bomodi, said no; that the issues are unrelated.
His words, “It has nothing to do with that, E-Invoicing/VIN Valuation is a CBN initiative, they are two separate things. The CBN proposed to have an E-Invoicing that a third party will be vetting, and be paid for the service.
“That will be delving into Customs functions, part of our job is to vet transactions based on the declaration of the importers, and if there are disputes concerning values, the department that is responsible for handling dispute is the valuation department.
“So you cannot bring a third party that has no experience in valuation, and they cannot come and now start giving values that are not authenticated, how are they going to do that? Which database are they relying on.
“So, the e-invoicing runs counter to WCO agreement on trade. That is what we are saying, that it is not necessary for the CBN to introduce a third party in this area when we already have a customs valuation unit that is doing that.”