By Taiwo Scholarstica
The Nigeria Customs Service (NCS) has announced that it exceeded its 2025 revenue target by 10.24 per cent, generating ₦7.28tn between January and December despite several government-approved tax waivers and fiscal incentives introduced to stimulate economic growth.
The Comptroller-General of Customs, Adewale Adeniyi, disclosed this on Monday while defending the agency’s 2025 budget performance and presenting its 2026 budget proposal before the House of Representatives Committee on Customs and Excise.
According to Adeniyi, the Service outperformed its annual revenue target of ₦6.58tn by ₦696bn, attributing the achievement to ongoing reforms in revenue administration, improved technology deployment, and enhanced trade facilitation measures.
He, however, pointed out that the executive summary of the budget document submitted to lawmakers contained an error.
The correct revenue generated from January to December 2025 is ₦7.28tn, which represents a positive variance of 10.24 per cent above the annual target of ₦6.58tn.
Adeniyi explained that the strong performance was recorded despite significant revenue losses resulting from fiscal policies introduced by the Federal Government to support key sectors of the economy.
According to him, the suspension of excise duty on telecommunications services remained in place throughout 2025, while other revenue measures, including the proposed green tax, had not yet been implemented.
He also cited healthcare waivers, tax concessions on pharmaceutical products, and duty exemptions granted under the Presidential Compressed Natural Gas initiative covering CNG-powered and electric vehicles as factors that reduced Customs earnings.
The Customs boss further disclosed that Import Duty Exemption Certificates accounted for the largest revenue shortfall, noting that in 2025, a total of about ₦34.53tn worth of imports received various exemptions and waivers.
The affected imports included military equipment and other strategic items approved under government intervention programmes.
He also noted that the limited number of products currently subject to excise duty constrained revenue generation, while geopolitical tensions in the Middle East disrupted global supply chains in the final quarter of 2025, affecting imports of strategic commodities, particularly wheat.
Meanwhile, the NCS recorded a projected revenue loss of ₦34.54tn due to the high volume of imports covered by Import Duty Exemption Certificates and the VAT Order.
Adeniyi stated that this massive sum of imports was made up of 56.40% petroleum products and 40.52% military imports.
On expenditure, the Comptroller-General disclosed that although the Service secured an approved budget of ₦1.13tn for the 2025 fiscal year, only ₦808.86bn was available for implementation.
He explained that the funding gap resulted from the transition from the old seven per cent Cost of Collection funding arrangement to the four per cent Free-on-Board (FOB) Cost of Collection mechanism introduced under the Nigeria Customs Service Act.
The Service relied on the seven per cent Cost of Collection until August before commencing implementation of the four per cent FOB arrangement.
Adeniyi commended the National Assembly for supporting the transition, saying the backing from lawmakers played a significant role in ensuring the successful implementation of the new funding framework.
The available funds were used to cover personnel costs, overhead expenses, capital projects, and concessionaire obligations.
During the budget defence, members of the House Committee requested clarifications regarding differences between the approved budget, actual funds received, and expenditure figures presented by Customs.
Responding, Adeniyi explained that the approved budget was based on projected funding under the four per cent FOB arrangement, while implementation reflected the delayed transition from the previous funding model.
He also disclosed that reforms carried out in collaboration with the International Monetary Fund and the World Customs Organisation had strengthened post-clearance audit operations, allowing the Service to recover revenue through real-time system audits.
According to him, the Authorised Economic Operator Programme and the Advance Ruling Programme are now fully operational and expected to improve compliance while facilitating legitimate trade.
Looking ahead, Adeniyi acknowledged that while new excise measures planned for 2026 could improve revenue collections, recently approved tariff reductions on imported vehicles may slow revenue growth.
He confirmed that import duty on used vehicles had been reduced from 15 per cent to five per cent, while duty on brand-new vehicles was cut from 20 per cent to 10 per cent.
For the 2026 fiscal year, the Nigeria Customs Service proposed ₦421.70bn for personnel costs, ₦307.77bn for overheads, and ₦565.93bn for capital expenditure, with investments expected to focus on infrastructure, ICT expansion, operational equipment, and the completion of ongoing projects.