Audit uncovers ₦101.17bn Customs remittance errors

A recent audit by OOM Professional Services has exposed a staggering ₦101.17 billion in misclassified and wrongly remitted revenue by the Nigeria Customs Service (NCS), prompting the Federation Account Allocation Committee (FAAC) to demand a full recovery and redistribution of the funds to the rightful beneficiaries.

The audit, which covered the 2022–2023 fiscal period, was commissioned by the Forum of Commissioners of Finance and presented at the FAAC plenary on May 16, 2025.

The findings were later affirmed at a July 10 stakeholders’ meeting attended by key agencies including the Federal Inland Revenue Service (FIRS), the Office of the Accountant-General of the Federation (OAGF), and the Central Bank of Nigeria (CBN).

According to a document obtained from a FAAC official, the most significant anomaly involved the wrongful classification of ₦82.04 billion as Import Duty instead of Import VAT.

The misclassification was traced to four commercial banks – Guaranty Trust Bank, Globus Bank, Taj Bank, and Nova Merchant Bank – which posted the revenue into the Federation Account instead of the VAT Pool Account.

This error distorted the revenue-sharing formula, unfairly reducing allocations due to state and local governments.

In a separate case, another ₦19.13 billion meant for the Federation Account was erroneously credited to the Consolidated Revenue Fund (CRF) of the Federal Government.

Of the ₦22.05 billion initially classified as CRF revenue, only ₦2.92 billion was legitimately due there, leaving the rest as misclassified Federation revenue.

These two discrepancies alone brought the total amount wrongly posted to ₦101.17 billion.

FAAC’s Post Mortem Sub-Committee observed that the errors not only affected allocations to government tiers but also distorted the cost of collection due to agencies like the FIRS, NCS, and the North-East Development Commission.

It also condemned commercial banks for delaying the remittance of revenues collected on behalf of the NCS, in some cases by weeks or months, in violation of financial regulations.

The committee has now directed that:

The ₦82.04 billion be recovered and redistributed using the VAT sharing formula.

The ₦19.13 billion wrongly paid into the CRF be returned and shared using the vertical revenue sharing formula.

The Office of the Accountant-General work out and disburse the corrected percentages to affected beneficiaries.

The report emphasized the need for fairness to sub-national governments and called for the payment of the auditing firm’s fees in recognition of their crucial role in uncovering the discrepancies.

When contacted, NCS spokesperson Abdullahi Maiwada declined to comment, saying he was unaware of the issue.

NUJ FCT also learned that the NCS contributed ₦359.42 billion to the Federation Account in May 2025, representing 16.56% of total revenue, while the FIRS and NUPRC led with ₦1.14 trillion and ₦615.13 billion respectively.