The Centre for Social Justice (CENSOJ) has raised concerns over disclosures that the Nigeria Customs Service (NCS) waived about N34 trillion in customs duties in the 2025 financial year.
The economic and social justice group argued in a statement signed by its Lead Director, Eze Onyekpere, that the figure, which dwarfs the actual revenue the federal government realised during the year, smacks of gross abuse of the provisions of the Fiscal Responsibility Act (FRA) and breakdown in fiscal discipline.
The alleged waiver came to light when the NCS appeared before the House of Representatives Committee on Finance, where officials explained that the agency implemented the waivers on authority of the Federal Government through the Minister of Finance and the Coordinating Minister of the Economy under existing law.
Lawmakers on the committee had queried the NCS and demanded a full breakdown of the beneficiaries of the waivers, along with the legal justification, including the purpose behind them.
CENSOJ noted that customs duty waivers were only a part of a much larger tax expenditure profile, which also includes tax holidays and exemptions offered to companies, often to lure foreign investments into priority sectors of the economy.
The civil society organization said a complete tally of all tax expenditures by the Federal Government for 2025 would likely be in excess of N34 trillion customs figure alone.
That number becomes more troubling, CENSOJ argued, when set against the government’s actual finances.
The federal government realised N28.23 trillion in consolidated revenue in 2025, falling short of a N36.35 trillion target — meaning the value of duties waived exceeded what the government actually realised.
The group questioned the logic of forgoing more revenue than was retained by the government while the country runs a substantial budget deficit and continues to borrow heavily.
CENSOJ queried the rationale of the decision behind giving up money that rightfully belongs to the treasury and then seek loans from creditors to cover the gap.
Citing the provisions of Section 29(1) of the Fiscal Responsibility Act, which requires that any proposed tax expenditure be evaluated for its budgetary impact both in the year it takes effect and in later years, CENSOJ said the law also stipulates that the Minister may only approve it if it does not damage revenue projections — or if it is paired with offsetting measures such as higher tax rates or a broader tax base.
CENSOJ contended that the 2025 waivers were not processed in accordance with the relevant provisions of the Fiscal Responsibility Act (FRA).
It demanded to know where the required impact assessment was, whether the waivers were submitted to the National Assembly for approval, and where the documentation of any offsetting revenue measures could be found, given that the Minister’s approval was conditioned on the waivers not harming revenue — a condition CENSOJ says was clearly violated.
Citing the Nigerian Tax Policy of 2017, which calls for revenue lost to tax incentives to be measured against the actual benefits achieved and reported yearly, CENSOJ said with qualitative justification required about where the benefits cannot be measured in numbers.
CENSOJ said it was not aware of any such annual reports being published despite years of waivers being granted.
Based on these gaps, CENSOJ concluded that Nigeria’s tax expenditure system has been poorly managed and possibly abused, arguing that laws giving officials wide discretion to waive such large sums of revenue amid rising deficits and continuous borrowing were out of step with democratic accountability.
The organization called on the National Assembly to amend relevant legislation so that total tax expenditure in any year cannot exceed ten percent of the previous year’s actual revenue.
Besides, it urged the National Assembly to make the relevant legislation requiring that proposed tax expenditures be submitted alongside the Appropriation Bill for approval as part of the federal budget process.
CENSOJ also urged lawmakers to use their oversight powers to enforce existing provisions of the Fiscal Responsibility Act.
