Following the implementation of the new foreign exchange policy of the Central Bank of Nigeria (CBN) by the officials of the Nigeria Customs Service (NCS) which saw the upwards review of the exchange rate for duty payment at the port from N326 to N361 per Dollar, the National Association of Government Approved Freight Forwarders (NAGAFF) has called for the review of the use of Form M as a tool for cargo declaration at the port.
The National President of NAGAFF, Chief Increase Uche who made this call in a telephone interview with our correspondent on Thursday said that the call had become necessary as it no longer help matters.
Uche observed that the use of Form M as a tool for cargo declaration was now causing confusion in the entire system whereby fiscal policy measure would suddenly increase the rate of tax that would be paid or used in calculating duty thereby creating serious upheaval on the side of the shipper trying to complete his transaction.
His word, “But it will be our very advice that government should review this use of Form M because it is no longer helping matter. Let them review the use of this Form M because it is now causing confusion in the entire system whereby fiscal policy measure will suddenly increase the rate of tax that will be paid or used in calculating duty thereby creating serious upheaval on the side of the shipper trying to complete his transaction.
He noted that the monetary policy of CBN in 2015 in restricting 41 items now almost 50 from accessing FOREX was to conserve foreign reserve which had not been achieved as the cause of that very problem was still on the use of that Form M and the applicable INCOTERMS, that is the use of Cost, Insurance and Freight (CIF) also which now allow the payment of freight charges by opening of Letters of Credit (LC) on CIF.
‘So, once you open LC on CIF, it then means you are paying the exporter the cost of the cargo but the freight through opening of Form M, you open Form M now, you use our foreign reserve to pay freight charges which is not proper. It is an aberration. That is why the depletion of the foreign reserve subsists.
“So, we need a review in that direction, it is very important. The CBN should also review this restriction of 41 items since they are all trade goods. They should relax this restriction so that the confusion being created that led to so many vices in shippers trying to ensure that they take delivery of their cargo will now be eliminated.”
He pointed out that it was his thinking that the Shippers’ Council would intervene in the implementation of the new exchange rate for duty payment but “I want to believe that the situation may even overwhelm them because it is a government policy, it doesn’t have to do purely on cost.”
“The consequence of all these things is that the freight forwarders are now being placed under limitless liability in the entire system that we are now the ones to bear the brunt of this sudden change. So, for government to do the needful is for them to relax it, have a review. We know that excess crude account is already going down and foreign reserve is already depleted but at the same time, we don’t need to kill some of these SMEs because once we continue to stifle them from meeting up their target, it will affect the overall economy.
“Customs has already given itself an annual revenue target of N2 trillion, so the possibility of them meeting up with the N2 trillion may no longer be there but another way of ensuring that they meet up with the target will be based on this new exchange rate that they have to work on. But we actually know that the forces that gave rise to this increment was the prevailing exchange rate of the Dollar”, he added.
Photo: NAGAFF National President, Chief Increase Uche.
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