Beneath the initial acceptance of the Practitioners’ Operating Fee (POF) by freight forwarders lies anxiety, which may change the tide of the scheme. Stakeholders have continued to express concerns over the modus operandi of the initiative, worried that it may end up being another conduit of exploitation, MUYIWA LUCAS reports.
LESS than two months into the commencement of the Council for Regulation of Freight Forwarding in Nigeria’s (CRFFN) Practitioners Operating Fees (POF) collection, there are discordant tunes over the process.
Although majority of freight forwarders had serious reservations about the initiative, they were conscripted into it by their unions and associations, whose position many saw as “self serving”.
The POF is the latest tax by the government, despite the already high cost of doing business at the ports, which is rated as the most expensive in West and Central Africa.
The POF, to be collected by the CRFFN, joins the many taxes collected by the Customs, Nigeria Ports Authority (NPA), and the Nigerian Maritime Administration and Safety Agency (NIMASA). The CRFFN, through the POF, is expected to generate over N7 billion yearly.
Unending taxes
A look at the number of levies or taxes at the ports indicates why doing business is not friendly. Stakeholders said over 30 various fees and taxes are being collected from the ports. For instance, the Nigeria Customs Service (NCS) alone charges import duty, excise duty, export duty, ETLS, NAC levy, CISS, sugar levy, rice levy, among others.
NIMASA charges levies, such as three percent on every vessel that enters waters and two percent Cabotage levy for local shipping business.
The Nigerian Ports Authority (NPA), Standards Organisation of Nigeria (SON), shipping companies and the terminal operators also collects their various taxes, levies and fees.
Perhaps, to express their frustrations, some importers last week cried out over what they see as “illegal tax” of N200,000 per container being collected from them by the SON. Few years ago, the Lagos State government introduced the Ports Landing Fee.
At present, the Nigeria Shippers’ Council (NSC) is planning the its own revenue generating tool through the reintroduction of the Cargo Tracking Note. Just recently, the NSC formulated a registration policy for shipping firms and importers with certain registration fees to be paid, it did not sail through.
The concerns
The POF sharing formula states that 20 per cent goes to CRFFN; 20 percent to the technical partners involved in the collection, SW Global; 25 per cent allotted as Internally Generated Revenue for the Federal Government and 35 per cent for the declarant, that is freight forwarder.
Furthermore, 100 per cent of the fund would first go into government’s Treasury Single Account (TSA) and applications would have to be made for any party to access the fund. While CRFFN and SW Global could apply for their percentages, it is unclear as to how freight forwarders or the associations will get theirs.
However, unfolding events around the POF has shown that the scheme was hurriedly put together, with the details not fine-tuned before it was implemented. For instance, a major worry for the POF collection is that there is no agreeable sharing formula among the associations and the payees.
The National President of ANLCA, Tony Nwabunike, explained that the CRFFN though promised to train freight forwarders and take care of their welfare alongside the freight forwarding associations from the proceeds of POF, there is no clear formula that has been agreed to be used for disbursement of the percentage that may accrue to the payees and the associations.
More worrisome, it is believed, is that there is no time frame attached to the sharing whether it will be monthly, quarterly or yearly, including the lack of a well- spelt out sharing formula.
Some stakeholders, who spoke to The Nation on condition of anonymity, said probing questions like what will be the channel of payees getting back their share of the fund ought to be explained.
For those not belonging to any association, but who pay the POF, there concern is to how they will get their own percentage share of the fee.
With this at the back of their mind, freight forwarders are worried that like the Cabotage Vessels Financing Fund (CVFF), which most ship owners had so much hope of solving their welfare and financial problems, but without any framework for disbursement up till date, the POF may likely to follow same way, thereby remaining a mirage.
Divergence
The CRFFN Registrar, Samuel Nwakohu, in previous engagements, made it clear that the government was yet to decide how the freight forwarders would access the monies, however, the technical partners and CRFFN were already clear on how to apply for theirs.
SW Global Managing Director, Mr. Abubakar Kuso, had also revealed that the money collected as POF would be paid into the TSA. “All the money go into the TSA.
It is the government that will disburse it after applications have been made for the fund. As the technical service providers, we don’t get our percentage until the money goes into TSA. Everybody would have to write an invoice to apply for the fund,” Kuso explained.
The founder, National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Boniface Aniebonam, asserted that 100 percent of the fund would not go to the TSA, as the technical partner, SW Global, would collect Associations’ 35 percent while remitting 65 percent to the TSA.
But Nwabunike agreed that these positions differ from what was earlier agreed. According to him, the practitioners were made to believe that while the percentage due to the federal government would go TSA, the funds for the technical partners, freight forwarders and CRFFN would go to a different account from where it would be properly disbursed to parties involved.
“I want to say that this association agreed totally that CRFFN should collect the POF based on the things they have told us. What did CRFFN tell us? They told us that they are going to train us from the money.
That we are going to get the one that will not go to TSA. That they are going to take care of us. That they will take care of our welfare and that they will take care of the associations,” he explained.
Nwabunike further explained that as much as his Aasociation supports POF, there is the need to know the critical aspects of POF and how to handle it.
“We are going to sit down with the Registrar, the Chairman. Don’t forget that we have 15 freight forwarders in that Council. All associations are going to come together to solve our problems. We need to streamline this thing but we should not stop POF collection.
Now that it is going on with TSA, it is a good thing because no money is lost. So, we implore everybody to continue to be law abiding, freight forwarders and customs brokers, until we get that thing sorted out. It is a process and they must move on,” he said.
Call for caution
A stakeholder, who pleaded not be mentioned, said the associations were in a haste to embrace the POF without understanding its nitty-gritty. Besides, he rues the discordant tunes playing out, saying that it is an indication that untidiness in the process.
“It is my candid opinion that all freight forwarders, importers and their associations who are involved in paying this fees should put their houses in order from the onset so that they could benefit from the POF as promised by the authorities, failing which they will have themselves to blame,” he said.
The stakeholder also warned that freight forwarders and their associations should learn from the disbursement debacle of the CVFF, which since 2003 has been elusive with no end in sight, especially knowing that any money that enters government purse in the country becomes extremely difficult, if not impossible to get out.
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