The Nigeria Customs Service (NCS) has said that as part of an effort to create an enabling business environment for investors, enterprises operating in the country’s Free Trade Zones (FTZ) will henceforth enjoy free duty for all locally sourced raw materials.
The Customs Comptroller General, Col. Hameed Ali (Rtd) who disclosed above over the weekend added that when a finished product from the raw materials is taken into the Customs territory, it will also not pay freight, while the companies will enjoy demurrage waivers.
Ali who was represented by the Deputy Comptroller General (DCG) in charge of Excise, Free Trade Zone and Industrial Incentive (Exc, FTZ & II), Katherine Ekekezie made these known during a stakeholders sensitisation meeting on procedure for goods manufactured in FTZs destined for Customs territory; held at the Apapa Customs Area Command, Lagos.
Ekekezie explained that the move is in line with the service trade facilitation agenda which has necessitated fashioning out a process for the release of goods manufactured, remodelled, stored or assembled in the zone and destined for trade within customs territories.
She said: “People in the free trade zones were complaining that they were treated like they weren’t in a free trade zone and procedures weren’t adhered to.
“The CGC called our attention in the Excise department and we also called the attention of the ICT unit and we set up a committee to look into the issues and find a solution. We reached out to the free trade zone operators, and then we went to work for more than one year to bring this to pass.
“This process is to resolve all the complaints we have been getting in the free trade zones. The process will unify every procedure of the Nigeria Customs Service, and all free trade zones in the country will abide by this same process. It is to make sure that Customs Duty is collected based on the imported raw materials.
“For example, if you use seven raw materials to produce an eye glass in the free trade zone, Customs is going to charge duty only on the raw materials that were imported. Assuming out of the seven raw materials; four were sourced locally and three were imported, Customs will collect Duty only on those three imported raw materials.
“This is one of the incentives given to the free trade zone operators because they are investors who have brought their money and have come to make the environment where the zone is sited better.
“Another one is that by the time the finished product is taken into the Customs territory, it will not pay freight. It is a very good incentive because the operators too are also supposed to give something back; it is give and take. Government gives you, and you also give government. You must make sure that the environment where you are is developed. Some of them build schools and hospitals, and of course, there will be massive employment for members of the local communities. These and many more are what we will benefit from the investors.
“I am happy and proud that the Nigeria Customs has now developed that process that investors in the free trade zone have been waiting for. We are no longer going to allow anybody to pay duty based on finished products; neither are you going to pay duty on all raw materials imported into the free trade zones. This is so because it is not all the raw materials that will be used for goods destined for Customs territory. Some of the products will be used right in the zone, while some will be exported, so they won’t need to pay duty, and that is why Customs said it will not allow any enterprise pay, that has stopped.
In reaction to stakeholders question as to the place of Form M, DCG Ekekezie explained that an enterprise in the FTZ cannot source for Form M because it is not supposed to be a Nigerian investor.
“Once you are within the free zone, you are not supposed to source for Form M and Customs will also not require PAR from you.
“But whoever is going to buy from you, who is now the importer taking his goods into the Nigerian market will source for Form M and it will capture the data showing the full product produced, all the raw materials used in producing the end product in percentages. The importer is the one responsible for the procurement of Form M and PAR”, she explained.
Also speaking, the Apapa Customs Area Controller (CAC), Comptroller Yusuf Mallanta said the sensitisation of stakeholders and training of Customs officers on the new procedure is important to the ongoing Customs drive to make all its procedures for effective and efficient service delivery tally with international best practice.
Source: Pinnacle Time