Nigeria commences enforcement of new tariff on imported vehicles
By Uche Usim
By Uche Usim
Nigeria Customs Service (NCS) has finally commenced full enforcement of the new tariff on imported vehicles rolled out by the Federal Government in 2013. Under the new regime, vehicle importers who hitherto paid 20 percent duty will henceforth pay 70 percent duty.
The tariff, which is an offshoot of the new automotive policy, clearly explains that fully built cars (ready to drive) now attract duty of 35 percent and levy of another 35 percent of the cost of the vehicle bringing the total tariff to 70 percent.
The new policy also puts the age ceiling for private vehicles at 10 and commercial ones at 15.
The spokesman of the Tin Can Island Command of the Nigeria Customs Service, Chris Osunkwo, who confirmed the enforcement of the new tariff to Daily Sun on phone said the circular from the Customs high command, says the new development takes immediate effect.
He however said the command would seek full clarification in some grey areas in the circular, especially whether it will affect both used and new vehicles.
“We’ve been hearing this planned increase in vehicle tariff since last year but we got the official document, a circular to that effect Tuesday and it said it is with immediate effect. As anyone will expect, the valuation unit is expected to take off immediately. But we still need to clarify from the headquarters if the new tariff will affect both used and new cars, the circulars just say fully built cars. Usually, when circulars like this come, it comes with clarification,” he said.
The development is already sending jitters down the spines of vehicle dealers and importers Lagos, who lamented that it will hurt their businesses and hike vehicle prices by at least 300 percent.
Clearing agents at the PTML command of Customs said the policy is already strangulating their business since it took effect on Wednesday, while scores of clearing agents and importers at the Tin Can Island Port yesterday held a peaceful protest urging the government to revert to the status quo.
They said the new policy, aside hurting the masses, will drive hundreds of them out of jobs. Chief Osita Chukwu, National Coordinator of Save Nigeria Freight Forwarders Importers and Exporters Coalition (SNIFFIEC), said the policy is completely anti-masses and should be resisted.
“We cannot accept the 70 percent tariff hike. It’s going to kill the masses. How many people will be able to buy used vehicles now? How many people can afford new ones as well? We totally reject this. We are going to shut down the ports if the government doesn’t rescind its decision on this matter. By the time over 3 million importers, exporters and other stakeholders withdraw their services from the ports, you can imagine the implication”, he said.
One major posh car dealers at the popular berger automobile market confided in Daily Sun that the development will fuel smuggling as that becomes the last option of the dealers.
“From latest developments, it means cars of 2003 are no longer allowed into the country. That’s bad. Nigeria currently makes about N30 billion yearly from used vehicle importation. It will lose that revenue with the new policy because only very few importers can afford to pay all the legitimate duties and levies. When you pay that, how much will you now sell the vehicles? Over 300 percent increase. A car of N400,000 will jump to over a million naira. Do you know the implication of that? People will resort to smuggling because they want to evade taxes and duties. When this starts, it will be another headache for the Customs”, he said.