The Federal Government, through the Federation Account Allocation Committee, has discontinued the long-standing seven per cent cost-of-collection deduction previously retained by the Nigerian Customs Service from Federation Account revenues, a move that effectively removes the agency from direct allocations of shared federal earnings, The PUNCH has gathered.
An analysis of the Federation Account Allocation Committee report for February 2026, which captured revenue generated in January, indicated that the Customs Service no longer receives the seven per cent cost-of-collection previously deducted from the federation’s earnings.
The line item that usually indicates the amount received as cost of collection showed that the Nigerian Customs Service recorded N0.00 for January 2026, a sharp contrast to the N24.01bn it received under the same category in December 2025.
The report, however, indicated that other revenue-generating agencies continued to receive their statutory deductions, with the Nigerian Upstream Petroleum Regulatory Commission receiving N21.44bn as a four per cent cost of collection, while the Nigerian Revenue Service received N44.16bn as a four per cent cost of collection for the month of January.
Our correspondent further gathered that the new arrangement was introduced by the Nigerian Customs Service Act, 2023.
The service is now funded through a statutory charge of at least four per cent of the Free-on-Board value of imports rather than through the Federation Account sharing system.
The development marks a major shift in the financing structure of one of Nigeria’s largest revenue-generating agencies and is expected to affect how federal revenues are distributed among the three tiers of government.
Confirming the change in an interview with our correspondent, the National Public Relations Officer of the Nigerian Customs Service, Deputy Controller Abdullahi Maiwada, said the agency no longer collects the seven per cent cost of collection from the Federation Account.
Maiwada explained that the new law governing the service provides a different funding model known as the Financing of the Customs Service, which is based on a percentage of import value rather than deductions from federally shared revenues.
The officer said, “Please check the Nigerian Customs Service Act of 2023. What we operate now is four per cent of the Free-on-Board value of imports under the financing arrangement for the service.
“That is what we use to run the service. So you shouldn’t expect any allocation from FAAC to the Nigerian Customs Service because we no longer collect the seven per cent surcharge as the cost of collection.
“What we collect now is the Financing of the Customs Service, which is based on four per cent of the Free-on-Board value of imports. So you should not expect any allocation from the FAAC sharing committee.
“The FAAC distribution is exclusively for the three tiers of government: the Federal Government, the states, and the Local Governments. The Nigerian Customs Service is not part of that sharing arrangement anymore.”
The PUNCH also gathered that the funding model is backed by Section 18 of the Nigerian Customs Service Act, 2023, which outlines the sources of financing for the service’s operations.