Controversy trails proposed merger of NIMASA, Customs, FIRS

•Tinubu’s economic advisers goof, taking wrong foot, job losses loom –Stakeholders

Controversy has continued to trail the proposed merger of the Nigerian Maritime Administration and Safety Agency (NIMASA), the Nigeria Customs Service (NCS) and the Federal Inland Revenue Service (FIRS) by the Policy Advisory Council set up by President Bola Tinubu to boost revenue generation.

Policy Advisory Council had also recommended the declaration of a state of emergency on revenue generation in the country.

The Council had proposed that the merger of the three agencies will enable efficient collection of all direct and indirect taxes, as well as levies on behalf of the Federal Government.

According to submissions made by the National Economy Sub-Committee, the policy will be aided by the passage of an Emergency Economic Reform Bill which will grant the President special powers to drive the economic reform agenda and support the delivery of sustainable and inclusive economic growth.

The three organisations will now transform into Nigerian Revenue Service, according to the report of the council, which has Senator Tokunbo Abiru, as chairman and Sumaila Zubairu, Dr Doris Anite and Dr Yemi Cardoso, as members.

The document was produced in partnership with KPMG, a consulting firm.

A revenue target of $1trillion was set within eight years from the planned recommended merger of the three agencies.

However, the proposed merger of NIMASA, Customs and FIRS has been stoking fire across the business community especially the maritime stakeholders, which described the proposed merger as evil. The stakeholders said Tinubu’s economic adviser goofed and are going to mislead Mr President in taking wrong foot. The merger will induce job losses and send wrong signals to the international business community. Merging NIMASA with other revenue generating agencies will cost Nigeria a place in the International Maritime Organisation (IMO) headed by United Nations (UN), according to stakeholders.

A maritime expert, Dr. Gideon Effong for instance said that President Tinubu should have stakeholder engagement to deliberate thoroughly on issues before taking any decision on the proposal.

He said Government should know that NIMASA is an international agency under the IMO charter, saying issues relating to policy affecting the agency should be carefully look into , adding that the Act that established NIMASA has never stated that it is a revenue collecting agency, which is the reason it cannot be merge with FIRS.

“The counsel of his economic advisers will mislead the president some day. The core mandate of NIMASA is not collecting revenue or revenue generation agency. Let the economic advisers go back to the drawing board and study carefully the mandate of these agencies before they present that nonsense they called report before the president.

“Did they know that the shipping industry represents a global trade in the World Trade Organisation (WTO) if shipping is grounded today, the world economy is grounded. This is to tell you that NIMASA is beyond an agency of the Federal Government. NIMASA is also an international agency of the IMO under the UN. The same thing goes to Customs. Customs is also an international organisation of World Customs Organisation (WCO).

“The revenue that comes from NIMASA is supposed to be used mainly for the development maritime industry and not for the national economy. I don’t merging agency together should be the headache of the president for now. What I expect him to do is to see how Nigeria can own its national shipping lines in order to end the $17 billion losing to foreign ship owners annually as freight,” he explained.

The former member Presidential Taskforce on the Reform of Nigeria Customs Service; Presidential Committee on Destination Inspection and Ministerial Committee on Fiscal Policy and Import Clearance Procedure, Lucky Eyis Amiwero, said NIMASA has nothing to do with Customs and FIRS, saying normally all over the world, they have FIRS and all other internal tax collectors but NIMASA has nothing to do with tax collectors. He said NIMASA was not supposed to be a tax collecting agency, adding that those economic advisers were wrong to have suggested or proposed the merger of NIMASA with other revenue agencies because there is no anywhere in the world such is done.

“Government can merge FIRS and other internal taxes together but NIMASA is not in tax and it is not supposed to be merged. NIMASA is not a collecting revenue agency but an agency set up to develop capacity of indigenous operators. They should be able to understand what is happening. They can’t just merge an agency that is not a tax collecting agency and NIMASA is not a collecting agency.

“The 3 per cent benchmark on import and export that NIMASA is collecting on freight is for development of indigenous capacity of vessels. Apart from that other thing are to be able to proceed with most of the things that are done by NIMASA and it is not revenue agency but set up to perform the activities that will lead to the development of the industry. “But merging FIRS with other revenue collecting agency is what it being done all over the world. It is being done in Ghana, South Africa, America and all those places. They have merged their revenue collecting agencies together,” he said.

He noted that the economic advisers that are talking may be don’t understand what is going on in the world. is not suppose to be part of it.

He said even if they merge Customs with FIRS that does not mean Customs is completely out, saying it is the collection of revenue that bring them together as it being done in Ghana and Tanzania.

He said if the economic advisers to the president do not understand the system, they should contact experts to educate them, saying they don’t know what they are doing by recommending the merger of NIMASAwith other agencies.

He said NIMASA is for transport and not supposed to be among the agency to be merged with other agencies under Ministry of Finance that are revenue collecting agencies.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said Customs, has two major roles, including trade facilitation revenue generation.

To that extent, he said Customs plays a major role in revenue generation and also generating information on trade and things like that.

However, he said there may be need for strong synergy between the Customs and revenue service, as they have a lot in common because a lot of revenue can also come from the Customs service.

“For NIMASA, it is not a core revenue generating agency just like Nigerian Ports Authority (NPA). I don’t see much justification for subsiding NIMASA into revenue service. What l will suggest is that this kind of proposal is very fundamental. You know it is just a suggestion by government. This still needs some rigorous engagement and discussion with the stakeholders so that they can deliberate on it thoroughly. This is not something Government needs to do in a hurry.

“The government should set up a proper committee to look at all of these things, involving all the critical stakeholders so that we don’t kill it in the process of trying to block revenue leakages and you will go and create more bigger problems both for operations and even the revenue you want to generate. So that should be my proposal,” he added.

He said there should be more rigorous engagement to look at it critically, saying that there is need to look at the post and cost because when the Government is anything to do, is optimise revenue generation because right now there is a lot of inefficiency and leakages in the whole revenue processes are managed.

“But in trying to improve that, we need to do more rigorous engagement and study to see they way it can be curbed before we take decisions. The proposal is not something you just jump into, so that you don’t do it and you start going back. You know there was a time government carried some accountants to the ports to be collecting the revenue while the Customs was doing other things. But the system didn’t work. So they had to scrap it.

“So these things requires very rigorous engagement and study and engagement with the stakeholders especially because when you are taking a decision when you are not in government is different from when you are taking a decision when you are now in government. When you are now in government, you have more access to information among people you can talk to and to be able look into the wider implication of any policy,” he explained. Also speaking the National President of African Association of Professional Freight Forwarders and Logistics of Nigeria, Frank Ogunojemite, said that merging the three agencies of government would encourage corruption and create unnecessary bottlenecks.

He added that the president must not fail to assemble experts to x-ray economic policy, adding that the process required could become cumbersome.

“President Bola Ahmed Tinubu’s administration must not fail to assemble experts to x-ray every economic policy to know how best it would benefit the country before its implementation. He must not sacrifice good governance on the alter of nepotism, we need round pegs in round holes if at all we sincerely need to progress as a nation. I believe that the council means well but the merger will not yield positive results.”

“The policy will impede ease of doing business as process requirements could become cumbersome. The policy can as well negatively affect the African Continental Free Trade Agreement and even jeopardize the single window policy of the Customs,” he said.

Meanwhile, the League of Maritime Editors (LOME) also advised the administration of President Ahmed Bola Tinubu against the proposal to merge the Federal Inland Revenue Service (FIRS), Nigerian Customs Service (NCS) and the Nigerian Maritime Administration and Safety Agency (NIMASA) as one single agency to be known as the Nigerian Revenue Service (NRS).

The League described such proposal as ill-conceived and misleading to the administration of Tinubu, which should not be allowed to see the light of the day.

Describing the proposal as anti-people, the association added that those behind the idea failed to consider the obvious dire consequences associated with merger which include mass sack of employees in all the agencies involved.

In a statement signed by the President of the League, Chief Timothy Okorocha, Secretary, Mr Felix Kumuyi and the Public Relations Officer, Mr Francis Ugwoke, the League argued that the Customs Service and NIMASA have different statutory roles to play as established by laws setting them up.

The statement pointed out that Customs is specifically for trade facilitation at different seaports, airports and border stations from where it collects accruing duties on such goods entering the country or being exported.

According to the statement, the only statutory obligation being performed by the Customs which is close to that of the FIRS is excise duty collection as tax, adding that this should not been seen as enough to call for the merger.

In the case of NIMASA, the statement said the agency was set up to regulate the maritime sector in terms of ships coming different destinations and those operating locally and using her territorial waters.

Beyond this role, the statement said, NIMASA is known for “indigenous shipping development, maritime safety administration; maritime labour regulation; marine pollution prevention and control; search and rescue; provision of direction and ensuring compliance with vessels security measures; air and coastal surveillance; Cabotage enforcement; ship registration; training and certification of seafarers and marine capacity development”.

According to League, there is no role in what NIMASA carries out that is so closely related with FIRS and Customs to call for the merger of the three agencies.

Perhaps, the only area connecting them is the collection of the three percent levy from vessels calling at the nation’s ports to be able to carry out administrative purposes and promote indigenous shipping development.

Besides, both NIMASA and Customs are key contributors to the consolidated revenue fund just like FIRS, the statement said.

Customs like FIRS which recorded N10.1trillion last year had also recorded N2.7 trillion in 2022 while withholding only 5 per cent allowed by law to carry out its statutory functions.

NIMASA had also contributed the sum of N37.69 billion to the Consolidated Revenue Fund (CRF) in 2021, N31.83bn in 2020 and has been doing so over the years.

The statement added: “the present administration should not consider introducing any policy that will inflict pains on already traumatized Nigerians considering that many thousands of youths graduate every year without hope of where to gain employment.

“Merging these three agencies will lead to more sack and reduction in employment opportunities for Nigerian youths in these agencies. Government should look for other ways of checking capital expenditure in these agencies and save money but certainly not to merge them.

“Right now, Customs has a staff strength of about 16,000 personnel, FIRS has about 12,000 workers while NIMASA has about 2,000, should government merge the agencies, the strength of the agencies to be known as ‘Nigerian Revenue Service’ (NRS) will go down by more than half. It will be survival of the fittest. Only those who are connected to the Presidency, governors, senators and high level monarchs will remain. This is not good for the economy. It will not even be good for the image of the administration.”