It depends on what the administrative structure is for implementing it because to the extent that the recommendation proposes to merge their function and that they have the same mandate in some ways, I think is a good idea because if you look at the CEMA Act (Customs and Excise Management Act) and the Federal Inland Revenue Service Act, you find out the mandate which both Acts confer on the two Services is similar. In the Customs Act, the mandate is to manage and collect customs duty for government while for the FIRS; it is collection of all revenues that is going to federal government of Nigeria. Customs duty are obviously a component of revenue to the government, the issue will now be that Customs Service will become a unit of the Federal Inland Revenue Service because its mandate is narrower than the mandate of FIRS. The only challenge will now be that from an administrative point of view, government has got to find a means to now take care of other heads of activities that the Customs undertake like the need for enforcement of anti-smuggling and contraband initiative, whether it can be undertaken under the canopy of FIRS is what they need to look at but from a cost savings point of view, the recommendation is good but government need to find the administrative structure to ensure that some of the Customs function which are non-revenue collection related are still covered.
The merger cannot work between Customs and FIRS because it looks like a mirage to me; it is just a mere recommendation. Nigeria has gone beyond that. FIRS has its own Act and Nigeria Customs Service is established and has its parliament; so if anybody wants to do a merger they need to go back to the national assembly and that is not easy and what is the opinion of the World Customs Organisation. If the country is in recession does not mean we should be thinking in a retrogressive way because it is retrogressive to merge these two together; they are two parallel lines that cannot work. It is not possible and not feasible.
It cannot be merged because the Federal Inland Revenue deals with taxes and Customs specifically focuses on Excise duty which is in form of tax and import duty which is also in form of tax although both of them actually generate revenue for the government which generally comes under fiscal policy issue. My worry is that the Custom activities is somewhat unique in the sense that they are dealing with a lot of items that are coming into the country while the FIRS focuses on corporate, organisation and individual taxes. So, to that extent these two are simply different but in terms of where the money goes into is the same as regards the federal revenue. Therefore, merging them will be have legality issues to get the Inland Revenue to work in standard with the Customs; so i am not quite sure what objective they intend to achieve with that. I feel Customs should remain on its own and continue its operations or rather Customs should be reformed properly so that there will not be ambiguity in the nation. The focus all along has been simply that Customs have two parallel means of revenue generation which is – import process which is approved by the government and the parallel one which seems not to have gotten any approval by the government but the government is perhaps weak to try to get Nigerian importers to follow only one form of import through i.e if you want to import anything into this country, you are bound to follow the ‘Form M’ process even if you are not going to buy foreign exchange from the government, the essence therefore of following Form M process is that the government becomes fully I the kow of what is going on and expected income that will come from the process. Where importers do not follow the import Form M guideline, they travel abroad to bring in their items into the country, at that point where they are about to get into the country, then single declaration process is done whereby Customs will physically inspect the items and also value it and that is the point of leakage because it is what they value that the government sees as the only revenue that comes in and what has gone under the table you dot know. Will merging Customs and FIRS sort out this problem? The answer is no. If Customs can be reformed and making it very clear and firm that the government is not going to tolerate any import that does not follow the government approval which was why it was said that an import coming into the country must reflect the Form M number on the Bill of Laden, and if not should be confiscated and sold. There is a huge weakness on the side of the government who at the end generate waiver to the importers involved. Also, the excise duty should be looked into and also see what is being imported and apply the duty rate at the point where it ought to be applied. I do not see any significant or material tendency that will be gained merging these two because the problem with these agencies would not be solved. But the focus of the government should be to ensure that they become very tough on their policies.
In my own opinion, merging the two will warrant conflict of interest because the Act which Nigeria Customs maintain is quite different from that of Federal Inland Revenue Service except otherwise there will be a new Act to get them to put things in order. Merging them will not proffer any solution to each of the Agency’s problems because Customs is paramilitary while FIRS is ordinary (a tax collector). Customs is no at tax collector but a revenue generator. If only Customs can go back to their initial mandate that all taxes that was collected should be taken back to FIRS then there will be no need for any merger.
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