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By Steve Agbota, [email protected]
“The Central Bank of Nigeria’s (CBN) e-invoice and e-valuators have been known to negate “the Technical Barriers of Trade (TBT) agreement which aim to ensure the elimination of unnecessary obstacle to trade.
“The TBT agreement strongly encourages members to base their measures on international standards as a means to facilitate trade, through its transparency provisions. You will agree with me that e-invoice will only achieve what is called “benchmarking of goods” thereby failing to create a healthy and enabling environment for trade to thrive,” This was the position of National Vice President, Association of Nigerian Licensed Customs Agents (ANLCA), Prince Kayode Farinto, before the House Committee Customs and Excise, Banking and Currency regarding the proposed E-invoicing by the Central Bank of Nigeria (CBN) for duty tax calculations on import cargoes.
On January 21, 2022, the CBN released guidelines for the newly introduced electronic invoicing (e-invoicing) and e-valuator for exporters and importers. The new policy was aimed at determining the accurate value of goods leaving the country or otherwise, according to CBN.
However, the apex bank said the electronic process would replace the hard copy and the invoice must be authenticated by the authorised dealer banks.
“Effective February 1, 2022, all import and export operations would require the submission of an electronic invoice authenticated by the authorised dealer banks on the Nigeria single-window portal – Trade Monitoring System.
“This new regulation is primarily aimed at achieving accurate value from import and export items in and out of Nigeria… No importer/exporter may effect payment to the credit of any foreign supplier unless the electronic invoice has been authenticated by authorised dealer banks presented together with the relevant document for payments,” the CBN said.
CBN said a yearly subscription fee of $350 shall be “charged per authentication of suppliers on the system.”
Ironically, stakeholders, exporters, importers and manufacturers have tagged the new guidelines for import and export anti-people policy.
Daily Sun learnt that following the pronouncement; several petitions have flooded the National Assembly as the guidelines continues to cause controversy.
Speaking on the same issue, Farinto told the National Assembly that e-invoices negate trade facilitation but may impose a regime of benchmarking commodities on Nigeria thereby leaving it isolated among the comity of nations. He argued that the CBN by virtue of the amended Act 7 of 2007, is misinterpreting Section 2 Sub-Section (a-e), where Sub-Section 2 (a) states that the CBN shall enforce monetary and price stability to dabble into issues affecting importation which falls under fiscal policies.
“We need to reiterate that the issue of fiscal policies and monetary policies is very clear and unambiguous on which agencies are responsible. The Federal Ministry of Finance should be responsible for implementing fiscal policies via Nigeria Customs Service (NCS), while the Central Bank of Nigeria (CBN) shall implement monetary policies.
“The CBN begins with issuing Forex Prohibition List for over 80 items, which are not under Import Prohibition List and this directives led to situations where the various commercial banks refused to open form M for Nigerian traders/importers, except very few privileged traders that can produce waiver letters from the CBN. This alone caused two issues in our import and export documentation,” he added.
However, he said the issue has led to a situation where many importers out of frustration resorted to false declarations of imports thereby affecting the level of compliance and a reduction in revenue that ought to accrue into the Federation account.
He stated that the various commercial banks began to extort the innocent importers to apply for waiver approval even when these Importers have gotten the forex from the black market, adding that the issue of false declaration has now become a norm in people’s daily lives which is affecting level of compliance negatively.
“Furthermore, the Central Bank also introduced a product price verification mechanism (PPVM) to stall over invoicing or mispricing of goods and services imported into Nigeria. The CBN directed all authorized dealers to verify quoted prices before form Ms are approved, which is an encroachment into the Nigeria Customs Service statutory role. “The world Trade Organisation (WTO) general agreement on Tariff and Trade, Article VII which has been domesticated in Nigeria as valuation Act 20 of 2003 clearly stipulates how prices can be determined for importation purposes under six (6) principles which are the transaction value of goods; the transaction value of identical goods; the transaction value of similar goods; the deductive value method; the computed value method and the fall back method.
He hinted the above valuation methods must even be used in hierarchical/sequential order, adding that the agreement is intended to provide a single system that is fair, uniform and neutral for the valuation of imported goods for Customs purposes and the only government agencies that can implement this, is the Nigeria Customs Service as they are signatory to the above Convention hence its domestication.
He also told the house that the Product Price Verification Mechanism (PPVM), which the CBN intend to introduce is embedded in the pre-arrival assessment report (PAAR) process platform at Customs ruling centre, saying that this method can only be implemented in the pre-shipment inspection regime (PIA), which has since been suspended, since 2002, otherwise if it is been introduced through the back door.
“It should be noted that neither the CBN nor any designated Commercial Bank have the requisite knowledge and competences to carry out PPVM without resorting to the use of CBN approved service providers. It is however evidently clear, that the service providers so approved are done to enrich some cronies and personal interest which is not in the interest of the nation or better put, providing jobs for the boys.
The Central Bank should know that even traders and Importers do have the right to an advance ruling by virtue of Article 3 of the World Trade Organisation of the 27 November, 2014 of the amendment of the Marrakesh Agreement. Section 9 Sub b(1) which states that, “the appropriate method or criteria and the application thereof, to be used for determining the Customs Value under a particular sets of fact, how does product price verification or the propose e-invoice fit into this condition?” he said.
In his recommendations before the National Assembly, he listed that CBN should be advised to focus on its primary functions of Monetary Policy and not Fiscal policies which has resulted itself to false declaration on imports.
He said that the CBN cannot evaluate prices, as it is the core function of the Nigeria Customs Service by virtue of the Customs and Excise management CEMA C45 2004 LFN and Valuation Act 20 of 2003 which provides for value of imported goods, which operates principally based on the Agreement on Customs Valuation (ACV).
The automatum of Customs procedure, has been a key component of Customs reforms and modernization initiatives, amongst which e-invoicing falls, and it is important to trade facilitation, which has been emphasized by International Organizations such as World Trade Organization (WTO), the World Bank, the United Nations Conference on Trade and Development (UNCTAD) and Organization for Economic Cooperation and Development (OECD).
He recommended that the Central Bank should be mandated to publish the list of forex beneficiaries on a monthly basis and also analyze the list of defaulters i.e. those that have received forex, for the purposes of importation but failed to utilized it for its intention and among others.
