The National Assembly is set to strip the Presidency of its powers to grant import waivers, just as it was revealed that about N58bn has been lost to waivers by the federal government this year.
These disclosures were made during a public hearing on Custom Service Bills 2012 and Companies Income Tax Act, 2004 organised by the Finance committees of both chambers.
The Bills, which has scaled second reading at both chambers of the National Assembly in general seeks to review the extant Customs Act, as well as the administration of the agency.
Customs, which is domiciled under the Ministry of Finance, serves as one of the major sources of federal revenue in the country alongside Nigerian National Petroleum Corporation (NNPC) and Federal Internal Revenue Service (FIRS).
The move to remove the powers to grant waivers by the President was reflected by the chairman of the senate committee on Finance, Sen. Ahmed Makarfi who as chairman during the public hearing said powers to grant waivers should be based on legislative recommendation.
The deliberation on the Bills came admits disagreement between the Minister of Finance, Dr Ngozi Okonjo Iweala, who did differed with certain recommendations of the Bill, particularly the procedure on appointment of board members into customs.
But making a case for a need to strip the President of granting import waivers, Senator Ahmed Makarfi, while replying the minister of finance said “even the National Assembly I know has problems with some of the powers you have said should be exercised by either the President or the Minister of Finance particularly powers on waiver. So the general view in the National Assembly is that power must not be exercised by any individual except if the legislature by some legislation or resolution takes a decision about it.
“So you have raised some fundamental issues that also of concern to the National Assembly so when you make your written presentation, we will continue engaging each other until we arrive at what we believe is the best for Nigeria. I can promise you on behalf of the committee as well as the National Assembly that we will produce a good bill for this country.”
Making her presentation, the Finance Minister, who was not enthused by the Bills, Okonjo-Iweala said “traditionally customs administration is under the supervision of the Minister of Finance in this country and it is fully accountable to the MOF for its operations. Cushions and Excise administration can therefore often not function independently of the policy trust and economic agenda and goals of the Federal Government.
“It must be appreciated that Customs basically is a revenue collection agency. It is expected that the minister of finance should align with the administration of customs the economic goals of government. That being said, and having established the basis on which the Customs function we want to make clear that in Customs there is policy trust and direction which should be given from the supervisory role to Customs and that is generally with the Ministry of Finance. And Customs is mainly an executive agency. One would think that a large part of this Bill resembles the bill that was started by the administration sometime ago and I don’t want to go into the history but as you know the Executive had begun to put together a new Customs Bill. But we feel that a large part of this proposed Bill aligns with what is in that bill but there is a significant part that does not align and this is where we have very strong concern perhaps even objection to parts of the bill. And we want to say that as a result of that we do not consider this a good bill at the moment in terms of the economic development of the country and we think that it will need significant amendment of those sections.
“The two or three mains issues we have is that in the present Bill the policy making powers and the executive powers are all vested largely in customs and are not separated. We believe that the Bill should separate the policy making powers from executive powers so that they can be properly aligned. The second thing is that many of the powers of the President that were granted in the former Bill have now been vitiated. The third is that many of the powers of the Minister in the former Bill have also now been vitiated.
“Let me just give a few examples of the problems. I believe that if we walk together in a partnership we will be able to perhaps get a bill that takes care of these problems and meet the concerns that we have and I hasten to say it has to be done in partnership.
What I am essentially saying is that the powers under the previous Bill granted to the Minister to make appointments have been very much restricted to a couple of people while the power to appoint people to the Board rests with the customs administration. This where you have he issue of policy versus execution. You can not have an organization having the large powers to appoint members to its own board to supervise itself. You have to separate these issues.
“In summary, the Bill gives significant powers to the Customs Service and ordinarily this should not be a bad thing but it does remove powers from the President and the Minister that we think are necessary to ensure that the economic agenda of the country are properly carried out as directed by the President and delegated to the Minister. I think we really need to look at what this Bill is trying to do in removing these powers and that is a very important problem that we have with the bill” she said.
However, the Nigerian Customs threw its weight behind the Bills. Picking holes in the the Comptroller General of customs, Abdulahi Dikko Inde, said existing customs act which the claim reveals a number of deficiencies arising from the fact that many actions being under taken by NCS are not provided for or codified in any law and therefore do not have a proper legal basis.
He said “many such actions are typically based on pronouncements from government, raising the question of where the powers to enact such policies came from except as provided by the powers of the executive president of Nigeria to enact policies. This then makes the pronouncements just policies and subject to judicial maneuvers especially if such policies contradict existing legislations. Furthermore, changes conducted in this fashion cloud the spirit of transparency and consultation. This, in turn, leads to lower private sector confidence in the overall system and a situation where investments and legal cross border transactions may be discouraged. The need to provide a proper legal basis for customs procedures based on broad stakeholders’ consultation reflect the realities of the trading environment”.
However, Senator Isa Galaudu, while decrying the loss of revenue resulting from waivers disclosed that the Customs has lost N58bn to waivers in 2012.
The Senators view was corroborated by the Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC)Elias Mbam, who lamented that the issuance of unnecessary waivers has become prevalent. He also advocated that the RMAFC should be included as members in a yet to be formed import waiver committee, to help with the revenue issues.
Reacting to the revenue loss Dr Okonjo Iweala clarified that N58bn loss is for the federation and not Customs.