With New Portal, CBN Moves to Halt Over-invoicing By Importers
*Exporters also guilty of under-invoicing
*Action will preserve Nigeria’s scarce forex
The Central Bank of Nigeria (CBN) has taken a major step to arrest the age-long practice of over-invoicing which dodgy importers and exporters have over the years used to cart away the nation’s forex with its directive that effective February 1, 2022, all import and export operations would require the submission of an electronic invoice (e-invoice) authenticated by Authorised Dealer Banks (ADBs) on the Nigeria Single Window Price Portal – Trade Monitoring System (TRMS).
A top central bank official who pleaded to remain anonymous, disclosed this in a chat with THISDAY yesterday, saying it would also help the country preserve forex.
The source reiterated that the new portal is a globally acceptable price monitoring platform where before a bank would open ‘Form M’ for a customer who wants to import, the price of the item being imported would be keyed into the portal.
The apex bank had explained in a circular at the weekend that the introduction of the e-valuator and e-Invoice would replace hard copy final invoice as part of the documentation required for all import and export transactions going forward.
The circular titled: “Guidelines on the Introduction of E-Evaluator, E-Invoicing for Import and Export in Nigeria,” signed by CBN Director, Trade and Exchange Department, Dr. Ozoemena Nnaji was directed to all authorised dealers and the price. The apex bank pointed out that the new regulation aims to achieve accurate value from import and export items in and out of the country.
But shedding more light on the new policy, the central bank insider explained: “Over the last several years, the Nigerian economy has suffered from the challenge of over-invoicing by importers and under-invoicing by exporters. Through over-invoicing, unscrupulous importers are able to illegally wire monies out of the country and ship them abroad.
“On the other hand, exporters, because they under-invoice their exports, are also able to take some monies abroad and when this happens, what would come back home would be lower than the actual exports.
“So, this portal is a globally acceptable price monitoring platform where before a bank can open ‘Form M’ for a customer who wants to import, the price of the item being imported is keyed into the portal. If that price that is being keyed into the portal is not more than 2.5 per cent above the globally acceptable price, the Form M is approved.
“But, if the price quoted by the importer is higher than two per cent above the globally acceptable price, the Form M is rejected automatically. It is to save massive forex for the country.”
Speaking further, the source alleged that most importers, whether Nigerians, Indians, Lebanese are involved in the illegal practice, “and so this is a fantastic idea to stop all that nonsense.”
The CBN circular had stated that the new system would operate on a Global Price Verification Mechanism guided by a benchmark price.
The benchmark price is the actual spot market price obtainable at the time of consummation of invoicing in that market where the goods are traded. The guideline however, provided exemptions from compliance with the new regulation for all individual invoices with a value of less than $10, 000 (or its equivalent in another currency), except where suppliers have an annual cumulative invoicing value equal to or above $500, 000 (or its equivalent in another currency).
Such would be required to submit their invoices regardless of the individual value of an invoice.
Exemptions were also granted to import and export transactions made by all security agencies in the country.
According to the CBN, supplies to diplomatic and consular missions as well as international agencies dependent on the United Nations are further exempted from the regulation, including donations made to foreign governments or international organisations to foundations, charities and recognised humanitarian organisations – and goods directly supplied by a foreign government.
The circular added that fees, where relevant, shall be advised from time to time as the system progresses.
Essentially, the guidelines stipulated that an importer/exporter of goods into Nigeria shall ensure that the purchase/sales contract with a foreign supplier/buyer stipulates compliance with the obligations set out in the regulation and that the supplier’s/seller’s invoice must be submitted in electronic format and authenticated by ADB as part of the documentation for payment.