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By Steve Agbota, [email protected]
Port operators and the entire maritime community are demanding investigations into the collection and utilisation of the 7 per cent port development levy introduced by the Federal Government decades ago.
The 7 per cent levy is collected on all goods imported through the seaports. It is officially collected by the Nigeria Customs Service (NCS) and redirected to the Nigerian Ports Authority (NPA) to use for rehabilitating and developing the ports.
While private terminal operators, as a result of the port reform of 2006, have been responsible for rehabilitating and developing port terminals; NPA has largely been responsible for developing common user facilities at the ports using proceeds from the port development levy.
Upon the announcement then, stakeholders, especially the clearing agents and shippers kicked against the collection of the 7 per cent port development levy and called for its abolishment. Their argument then was that the levy will add to the cost of goods and the local manufacturer will experience a setback.
They argued that since the ports have been concessioned to private operators; there was no need for Nigerian shippers to keep paying the 7 per cent levy. They recommended that the levy be reviewed so as to accommodate the concession where most developmental projects have been allocated to the concessionaires. In spite of these agitations, the federal government turned a deaf ear and eventually reversed the policy as the money is being collected and redirected to NPA for rehabilitating and developing the ports.
Initially, the money, stakeholders noted, was used for the development of the nation’s ports for a period of time. But today, the money is no longer used for the development of the ports and is still being collected, according to operators.
Today, the nation’s ports are still grappling with infrastructural challenges like bad roads, no holding bays and abscence of trailer parks, which stakeholders expected the port levy be used to address.
Daily Sun learnt that the mandatory port levy was one of the reasons many Nigerian shippers diverted their cargoes to neighbouring countries’ sea terminals as they said it was unbearable.
Speaking to Daily Sun, the National President of the National Council of Managing Director of Licensed Customs Agents (NCMDLCA), Mr. Lucky Amiwero said that 7 per cent port development levy is something government has been using for their own private interest, adding that it is just few people using it.
He said the surcharge was established during former President Olusegun Obasanjo’s regime and was used to develop other ports such as Warri Port, Tin Can Port and Port Harcourt Port.
According to him, those are the levy that was paying back, amortising the payment of the Ports, saying since then, the Port development levy has been used as a racket.
“I remember, I was a member of that committee where the 7 per cent was used for Nigerian Ports Authority (NPA) main building. I was in that committee and it was used for Lillypond. That 7 per cent was used and after that, it has not been used. And that 7 per cent is still being collected.
“So first is the government to go and set up a committee to look at that 7 per cent. I wont say they should scrap it but it be used for the development of the Port like the Port access roads, the trailer parks and loading bay. These are all Port facilities that bring facilitation.
“You don’t cancel it. It is better to be there and to be used because that 7 per cent, Shippers’ Council has almost 3 per cent. If you cancel it, Shippers’ Council will have any point. They have one or two agencies that handle that thing because I was part of that committee that recommended that if NPA is concession that the 7 per cent should be scrapped,” he said.
He said if they should scrap it not, there would be problem of Port development like roads, holding bay and trailer parks. He said there is no trailer park, which is why trailers littered all the Port access roads, which is not a good development.
He said that 7 per cent should be used because NPA is having almost 4 per cent while Shippers’ Council is having 2 to 3 per cent and Raw Material Research Agency is having 1 per cent.
He advised that the 7 per cent Port development levy should be investigated by government and look at how much is in the fund, so that the fund should be used to develop the Ports.
“If you look at Tin Can and Onne Ports, that money is supposed to use to develop them not for private individual eating the money. People have been eating that money for a very long time and government should investigate that money.
“NPA should account for that money because the money is being collected by Customs under the Ministry of Finance. They should account for that 4 per cent or 3 per cent. It is very important that they account for it. You don’t need to cancel it but it will help to develop the Ports if it is well utilised,” he said.
Also speaking to Daily Sun, the Managing Director of Sula Marine Global Limited, a freight forewarding firm, Sulaiman Ayokunle, said then when NPA was in charge of maintaining and managing the main port harbor and other areas including all port terminals, Federal Government decided that 7 per cent surcharge from duty must be paid.
“But to our surprise even after concessioning the Port to concessionaires, the 7 per cent still remain and terminal operations and maintenance were hands of NPA, which we have been asking this 7 per cent according to them, where is the money going to since it is no more for the development of the ports.
“No one can pinpoint any strategic area that has witnessed development by expenditure generating from NPA. It is TICT? Five Star Terminal? Is it Port and Cargo? It is APMT Terminal? Is it Greenview? So as you are asking me this question, we too, we are asking but nobody is tangible response.
“They said part of the money goes to the port economic regulator that is Nigerian Shippers’ Council. At what rate, what percentage? What percentage goes to NPA? How is it share? How is it divided? But nobody is giving any conclusive answer,” he added.
Meanwhile, the Chief Executive Officer of Wealthy Honey Nigeria Limited, Dr. Kayode Farinto called on the Federal Government to abrogate 7 per cent port development levy and 15 per cent import adjustment tax placed on used vehicles in order to mitigate the hardship of Nigerians.
Speaking with Daily Sun, Farinto said that if government really wants to reduce the suffering of people, these taxes need to be abolished because they are not adding value to the nation’s economy.
He urged the economic committee set up by the President Bola Tinubu to look into the issues of double taxation as if affects Nigerians.
“I have written about six pages proposal to this committee. I have also recommended in line with the fact that government is talking about mitigants. The only way you can mitigate some of this hardship is to see that you reduce the suffering of Nigerians. How can you do that? I have proposed that they should abrogate the 7 per cent port levy.
“I have proposed that the way we compute our VAT is wrong. It is too outrageous and it is inimical to trade. VAT is Value Added Tax and it is a consumption tax. And what is VAT; you bought this red Polo at five dollars. Then, my VAT should be based at those five dollars. But in a situation you are calculating the VAT, you now calculate it on Free on Board (FoB), you add it to duty, you add it to ECOWAS Trade Liberalization Scheme (ETLS) and another thing and you now multiply by 7.5 per cent, it is a double taxation.
“These are the things I have proposed to that committee. Double taxation should be look into. These are also mitigants to ameliorate the suffering of the masses.
And one of the other things I also proposed is the fact that we are not a producing nation. Let us look at the fact that government is talking about 12 years on used vehicles, let us see how we can increase it to 15 years acceptable into our economy and also abrogate the 15 per cent import adjustment tax placed on used vehicles,” he added.
He said the 15 per cent import adjustment tax placed on used vehicles is not adding value to the nation’s economy, saying instead, it is making the cost of vehicles particularly used vehicles, which is third hand vehicles to be too exorbitant in Nigeria.
