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Rice investors decry Customs action on retrospective duty

By on July 31, 2015

Rice investors and importers in the country are unhappy with the action of the Nigeria Customs Service (NCS), who sealed their warehouses over alleged non-payment of N23.60 billion importation levy.

Some of the importers are said to be particularly miffed with the action of the NCS since they undertake their businesses in compliance within the provisions of the law.

The sealed companies include OLAM, Stallion, Masco Agro, Ebony Agro and Conti Agro (Milan).

The bonafide rice investors have in the past alleged that the quantum and the basis of allocation of quotas for 2014 were not in order, and were issued late after all the imports were made and goods sold, implying there was no real “excess”.

The controversy over the 2014 allocation of quotas for rice importation into the country is already a matter of adjudication, since some of the companies involved have charged the NCS to court.

It may be recalled that following the confusion that trailed the 2014 quotas, quotas for 2015 were also issued, canceled and later on reissued again.

The implementation of the policy received a lot of criticism predominantly around the fact that the process followed was not in accordance with the presidential directives.

Rice investors are concerned that the recent action of NCS is based on the said unfair allocation of quotas and they are being subject to unwarranted harassment notwithstanding their substantial investments into the rice industry.

Consequently, some of the investors query the rationale of the NCS to unnecessarily hinder the activities of foreign investors under a government that claims to be business friendly

On May 26, 2014, President Jonathan had granted approval for investors with rice milling capacity and verifiable backward integration programme to import rice at 10 per cent duty with a levy of 20 per cent for a period of four years.

The objective was to encourage proven investors in the rice value chain whilst addressing the supply gap effectively. The Ministry of Finance issued a circular dated July 8, 2014 to this effect. Several millers certified as bonafide by the Ministry of Finance commenced import based on the undoubted authenticity of the circular.

However, the subsequent sequence of events led to a chaotic environment, with the rice importers highlighting several problem that include the 2014 allocations made by the Ministry of Agriculture which was not valid as its was not made as stipulated by the President (to be made by an Inter Ministerial Committee).

•The allocations were made late, after 6 months from the stipulation in December 2014, too late to meet the country’s rice demand for the season. There was a six month gap with no communication to investors on allocations which created uncertainty in the market.

•The quotas were imposed with retrospective effect, after the importers had already cleared the shipments and delivered them to their customers, based on incurred landed costs. This is legally questionable.
Sensing that something was seriously wrong, the former Presidency called for the cancellation of the 2015 quotas and a full review of the 2014 implementation under the leadership of the Vice President.

However, it seemed that the issues were not resolved, leaving the new administration with a problem to be resolved on priority.

 

[ThisDay]