The Federal Government has discontinued the 7 percent cost-of-collection deduction previously retained by the Nigeria Customs Service from Federation Account revenues.
The change removes the agency from direct allocations of funds shared through the Federation Account Allocation Committee.
Under the previous arrangement, the Nigeria Customs Service deducted seven percent from revenues it collected as a cost of collection before remitting the balance into the Federation Account.
Data from the FAAC report for February 2026, which covered January revenue, showed that the Customs Service recorded zero allocation under the cost-of-collection line, compared to ₦24.01 billion in December 2025.
The change follows provisions in the Nigeria Customs Service Act 2023, which introduced a new funding structure for the agency.
Under the new arrangement, the Customs Service is now funded through at least four percent of the Free-on-Board value of imports, rather than deductions from the Federation Account.
The National Public Relations Officer of the agency, Abdullahi Maiwada, confirmed the development and explained the shift in funding structure.
He said:
“You shouldn’t expect any allocation from FAAC… we no longer collect the seven per cent surcharge.”
He added that the current system is based on a financing model tied to import value, as provided by law.
The Nigeria Customs Service Act provides that the agency may also receive funding from:
- Cost-based user fees
- Budgetary allocations where applicable
- Grants and development partner support
The law also allows for adjustments to the four percent charge, subject to approval by the National Assembly.
The removal of the seven percent deduction changes how revenue is distributed through FAAC.
Previously, such deductions reduced the total amount available for sharing among the three tiers of government.
Under the new structure, FAAC allocations are now limited to the Federal Government, state governments and local government councils, excluding the Customs Service.
