Nigeria Ends Customs' 7% Deduction Policy Effective 2026

The Federal Government of Nigeria has officially discontinued the Nigerian Customs Service's long-standing 7% deduction policy from the Federal Account Allocation Committee, effective from January 2026. This decision marks a significant shift in the financial structure of Nigeria's largest revenue-generating agency.

According to Abdullahi Maiwada, the Deputy Controller of the Nigerian Customs Service, the agency will no longer receive the 7% cost collection deduction previously allocated from federal earnings. Instead, the new funding model, introduced under the Nigerian Customs Service Act 2023, stipulates that the agency will operate on a statutory charge of at least 4% based on the free onboard value of imports.

This change is expected to impact the distribution of federal revenue among the three tiers of government, as the Nigerian Customs Service will no longer be part of the revenue-sharing arrangement. The agency generated N282.83 billion in revenue in 2025, making it one of the largest contributors to the federal account alongside the NNPC.