The Nigerian Federal Government has discontinued the 7% cost-of-collection deduction from Federation Account revenues previously allocated to the Customs Service.
The Federal Government of Nigeria has officially announced the discontinuation of the 7% cost-of-collection deduction that the Nigerian Customs Service had been retaining from the Federation Account revenues. This decision was revealed through a report from the Federation Account Allocation Committee (FAAC), indicating that the Customs Service would no longer receive direct allocations from shared federal earnings. The report for February 2026, which reflected revenue generated in January, showed a stark contrast to previous allocations, particularly noting that the Customs Service recorded zero income under this category for the month, compared to the N24.01 billion it received in December 2025.
This significant shift in policy underscores a wider strategy by the Nigerian government to increase transparency in revenue distribution among federal agencies. The removal of this deduction means that other revenue-generating agencies will continue to receive their statutory deductions, reflecting a prioritization of a more equitable allocation system in managing public resources. The impact of this policy change might prompt discussions around the financial management of the Customs Service and its future operations without this guaranteed source of income.
Overall, the cessation of the 7% deduction highlights the government's ongoing attempts to reform and streamline fiscal policies, which could signal broader changes in how revenue is managed across federal agencies. Stakeholders will likely be monitoring the effects of this decision closely, as it may influence the efficiency and operational funding of the Nigerian Customs Service in the coming months.
