Senate Committee Probe Rakes in N140 Billion for FG 

Senate Committee probe rakes in N140 Billion for Federal Government  as interim report identifies 32 sources of revenue losses in the import-export value Chain writes Durosinmi Mese

The Senate Joint Committee On Customs, Excise and Tariff and Marine Transport Wednesday Disclosed that total financial recoveries from companies being investigated by the committee amounted to a whopping N140 Billion Naira.

The Joint committee was set up by the Senate to carry out a holistic investigation into the activities of the Nigerian Customs Services (NCS) with a view to identifying leakages and irregularities in the system and come up with recommendations that will reinvigorate the revenue drive of the Nigeria Customs Service.

Presenting its Interim Report on the Floor of the Senate, Chairman of the Committee, Senator Hope Uzodinma disclosed that as a result of the exercise, some collection banks have made remittances to the Central Bank of Nigeria (CBN) to the tune of N128 Billion, while from the selected 60 companies under investigation, over N12 Billion payments have been made to the federal government.

“As a result of this exercise, some collection banks have made additional remittances to the Central Bank of Nigeria to the tune of N128 Billion and evidence of payment and receipt have been received by the committee” he said, adding that “from the selected 60 companies, over N12 Billion payments have been made to the government voluntarily by the companies based on their own internal self-audit after receiving documented evidence of their culpability from our committee”.

Senator Uzodinma however noted that despite all the payments so far made, none of the approved collection banks or the selected companies have fully cleared the established liabilities against them”.

He stated that in the course of its investigation, the committee identified 32 leakage channels as the major sources of revenue loss in the import-export value chain.

He listed these leakage channels to include undervaluation, wrong tariff classification, abuse of waivers and concessions, abuse of diplomatic cargo and personal effects privilege to clear consignments to submission of forged documents for pre-Arrival Assessment Report (PAARS) and Single Goods Declarations (SDGS) processing, Pre-Arrival Assessment Report (PAAR) used for more than one Single Goods Declaration, non-utilization of Pre-Arrival Assessment Report (PAAR) after Single Goods Declaration (SGD) cancellation and mismatch and discrepancies in consignees, goods description and Tariff classification.

Other sources of leakage identified by the committee include falsification of import documentation such as proforma invoice, final invoice, bills of lading, NAFDAC and SONCAP. There are also issues like Non-imputation of complete VIN (Vehicle Identification Number) in inspection acts and bills of lading in order to undervalue vehicles, clearance of new vehicles without form M or Pre-Arrival Assessment Report (PAAR) processing in clear violation of Destination Inspection, abuse of temporary importation by conversion to home use without payment of import duties, falsification of factory production registers, inaccurate Unit Cost Analysis (UCA) and returns leading to significantly low excise duty collected as compared to actual large scale volumes of excisable commodities locally manufactured.

Other sources of revenue losses include abuse of Fast Track Blue lane, illegal creation, amendment, and cancellation of Single Goods Declaration (SGDs), Pre-Arrival Assessment Reports (PAARs) and Bills of lading, and importation under pretext of Completely Knocked Down (CKD) privilege reserved for Bona fide manufactures leading to reduction in import duties payable among others.

He noted that these infractions within the system have disproportionately distorted the economic profile of the country and placed extensive pressures on the nation’s scarce foreign exchange.

“It also negates all Central Bank of Nigeria initiated foreign exchange management plans. This is because a distorted forex requirement does not essentially reflect the actual forex need of individuals and businesses in the country. This situation benefits only the purveyors of capital flight from the country and adds absolutely no value to the nation” he added.

Meanwhile, the Senate has commended the efforts of the committee in helping to recover such huge sums into the coffers of the federal government.

Speaking on behalf of the Senate, Deputy Senate President, Ike Ekeremadu said the committee’s achievement should be emulated by other committees, adding that the upper chamber was proud of their efforts.

In Separate reactions Commending the activities of the committee, some Civil Society Organizations said the committee has passed the integrity test.

The Executive Director of the Centre for Advocacy and Leadership Development (CALD), Joe Mesele said the recoveries through the Senate Committee investigations have brightened the hope of Nigerians for effective and honest oversight activities in the National Assembly.

“Some of us within the Civil Society Community did not give the committee any chance of performance but we have obviously been proved wrong with these huge recoveries’’, he stated.

According to him, “what is left now is for Nigerians, especially players in the corporate world to rally round by cooperating with the committee to conclude its assignment with more successes”.

The Committee had requested for memoranda through newspaper publications and also invited key stakeholders to a One-Day Public Hearing held on Thursday, July 20, 2017.

Armed with concise data from its data handling process, the committee proceeded to invite the concerned commercial banks and handed them relevant data in soft and hard copies for their responses.

After this, the committee went ahead to carefully select a set of companies from diverse sectors of the economy to validate its methods and present a reliable template for its assignment. The companies were then given ample time to study the records and counter the records with their own data or admit culpability. The authenticity of the data presented to them led many of the companies which through independent self-audit commenced the process of paying back to government  transactions dating back to 2009 and presenting evidence of such payments before the committee.

Senator Uzodinma in his report said a total number of 60 companies were invited in this first phase of investigations and that the widespread nature of the malfeasance had not only stunted the growth of genuine industries in the economy but has continuously weakened the nation’s  currency in comparism with other regional and international currencies.

“A situation where the Central Bank of Nigeria, who is the administrator of the Comprehensive Import Supervision Scheme (CISS) is handicapped by its inability to access empirical records of the country’s actual trade volumes, and have no concrete programme for ensuring the monitoring and compliance of their foreign exchange manual, prevents them from providing a concise forex utilization profile of the companies that source forex from them. This in our view indicates a much deeper problem than what has been uncovered”, he declared.

The committee which sought for extension of its mandate to be able to fully complete its job was given eight more weeks by the Senate.

–Durosinmi Meseko is the Consultant, Media Services to the Senate Committee on Customs, Excise and Tariff.