By Our Correspondent
The Federal Government of Nigeria has officially ended the long-standing policy that allowed the Nigeria Customs Service to deduct 7% of its internally generated revenue before remitting funds to the Federation Account Allocation Committee. This move marks a significant shift in the country’s revenue management framework.
Under the previous arrangement, the Customs Service retained a portion of the revenue it collected to cover operational costs, while the remaining funds were paid into the federation account for distribution among federal, state, and local governments. With the cancellation of this policy, the agency is now required to remit all collected revenue in full, without any upfront deductions.
This decision is widely seen as part of broader efforts to improve transparency, accountability, and efficiency in Nigeria’s public finance system. By ensuring that all revenues are centrally pooled before distribution, the government aims to strengthen fiscal discipline and enhance trust in revenue-generating institutions.
However, the policy change also raises questions about how the Customs Service will fund its operations going forward. Without direct access to a percentage of its collections, the agency will depend more heavily on budgetary allocations from the Federal Government. This could present challenges if funding is delayed or insufficient.
Overall, the removal of the 7% deduction policy is expected to increase the funds available for sharing through FAAC, potentially boosting allocations to states and local governments while reinforcing a more transparent revenue system.
