Uncertainties, Nightmare Grip Importers Over FG’s Reduction of Vehicle Tariff
By DAPO OLAWUNI
Since the Federal Government announcedin 2020 the planned reduction of tariff on imported vehicles, there has been high expectations from vehicle dealers, especially their importers and investors abroad.
When the Federal Government in the proposed policy in 2020 Finance Bill, announced plans to slash “levies” on imported new vehicles from 35% to 5%, many importers expected it to take effect immediately.
Recall that the automotive policy of the federal government in 2013 slammed a 35% and 35% levy on new vehicles, while used vehicles pay just 35% duty without levy.
Findings by DAILY TREND NEWS has however revealed that the proposed reduction by the government only applies to new vehicles, they are now to pay 35% duty and 5% levy.
Used vehicles (Tokunbo) on the other hand would continue to pay their 35% duty, without levy.
One of the stakeholders at the Tin Can Island Port, Chief Mike Okolichi confirmed that even though the Federal Government is yet to gazette the planned duty reduction, many importers were not well informed, and are now insisting their cars must be cleared at 5% duty.
“There is a lot of uncertainties over the reduction in tariff, the government have said new vehicles would attract 35% duty and 5% levy”
“On Tokunbo vehicles, it is only 35% duty, it has not been paying levy before now, so it is still the same”
“Importers are confused right now because they dont listen, it is only when the gazette is out that they would know, some of them have been calling and saying they would not pay because government has reduced duty to 5%”
“There is no Tokunboh vehicles that would pay 5% duty, used vehicles are not benefitting anything from the reduction” he said
Chief Okolichi also stated that by virtue of age of vehicles, any vehicle manufactured in 2005 is now above 15years and are now contraband.
“The used vehicles also has years of prohibition, any vehicle above 15years cannot be imported, any 2005 car is now prohibited, 2006 vehicles are the limit for now”
He said, right now, the automobile sector investors are not happy with the planned reduction in tariff because it is going to affect their business.
“How would I buy a Nigerian automobile car when it is far more cheaper to import a new vehicle and pay 35% duty and 5% levy, it is cheaper bringing new vehicles now than the assembled ones here”
“Nigerian made vehicles are very expensive and no ordinary Nigerian can afford it” he said
Also speaking with our correspondent, a licensed customs agent at PTML Terminal, the biggest vehicle port in Nigeria, Mr. Sunny Nnebe said the duty reduction if not frustrated, would encourage importers to go for new vehicles in place of used and accidented “death-trap” vehicles that flooded Nigerian ports and markets.
He expressed fears that the Nigeria Customs officers would still want to frustrate the reduction in tariff.
“Reduction in vehicle duty is a welcome idea if its implemented and allowed a free hand to flow”
“In a situation whereby duty is reduced on new vehicles and you change the CIF from $15,000 to $25,000, it will still amount to the same thing , alert will be coming from all angles simply because they still want to generate the same revenue as at when vehicles pay 35% on both duty and levy respectively”
“Importers are fully ready to start opening letters of credit for importation of new vehicles”
“There is a lot of uncertainty from both the customs and the ministry of finance whose silence over the implementation of this policy is causing the importer’s serious night mare”
“My take on this is, let government enforce the implementation of the policy without further delay and ensure that all bottle neck is removed” he said
In the draft 2020 Finance Bill, the Federal Government proposes reduction in duties on tractors from 35 to 10 per cent; from 35 to 10 per cent on vehicles for transportation of goods; and 35 to five per cent on vehicles for transportation of persons (cars).
