UPDATED: Duty on used cars not increased to 70% says Aganga
By Olalekan Adetayo
Minister of Industry, Trade and Investment,
Mr. Olusegun Aganga, on Wednesday said there was no truth in media
reports that duty on used cars had been increased to 70 per cent with
effect from July 1 based on the new National Automotive Policy.
He said contrary to the report, the duty of used cars remained 35 per cent.
Aganga said this in an interview with State House correspondents at the end of the weekly Federal Executive Council meeting during which he said he briefed council members in order to correct the misrepresentation.
He explained that all
those assembling cars in the country would be allowed to import at 35
per cent duty to bridge the gap that may arise between demand and supply.
He however said 70 per
cent duty would be applicable to those who he said are not ready to
assemble cars locally but prefer to engage in trading by bringing the
commodities from abroad.
The decision, he
explained, was aimed at protecting those assembling cars locally and
make importation unprofitable, hence unattractive.
He said, “The article
(media report) had claimed that the duty on used cars is now 70 per cent
from July 1, that is incorrect. It is 35 per cent.
“It (the report) also
claimed that all used cars now coming into the country would pay duty of
70 percent, that again is incorrect.
“For all those in the auto policy
programme, all those assembling cars in the programme, the policy is
that they would be able to import cars to meet the gap when you look at
production and the demands in the country, they would be able to import
those cars at 35 per cent, so it is not 70 per cent.
“It is only for those
who are putting strain on our foreign reserves, those who have no
intention to create jobs, those who want to continue to remain traders
that the 70 per cent applies to and this is to discourage trading.
“It is to encourage
local assembly and job creation and stop unnecessary pressure on our
foreign reserves. So it is an economic issue and it is very deliberate.
“Why would you import cars
at 70 per cent while others are importing at 35 per cent ? So, we do
not expect to see anyone importing cars at 70 per cent. It was just a
measure to encourage people to go within the policy group.
“When you look at the
blended rate of those in the auto programme for the CKDs, SKD 1 and SKD
2, they bring to the country, they only pay duty of zero per cent, five
per cent and 10 per cent.
“So when you look at the
blended rate of what they produce locally and what they import, it is
just above 20 per cent. That is the policy and that is why all the
manufacturers, assemblers of cars which include some of the major
distributors of cars and importers of cars before, companies like
sterling, even Cocharis they have given an undertaking they will not
increase their prices at all. Anyone who wants to buy cars from anyone of them, they will find out that none of them plans to or has increased prices at all.”
Aganga said the Federal
Government would continue to monitor prices of cars every week because
the new policy should not lead to any price increase if operators are
being fair to Nigerian consumers.
The minister explained that in every country where there is auto policy, used cars are banned.