The Federal Government has hiked the import duty payable on both new and fairly used vehicles to 70 per cent, SHIPS & PORTS DAILY can authoritatively reveal.
A memo by the Coordinating Minister for the Economy/Finance Minister, Dr. Ngozi Okonjo-Iweala, sent to the Comptroller-General of Nigeria Customs Service (NCS), Dikko Inde Abdullahi, last week, directed that imported fully built unit (FBU) cars shall now attract 35 per cent duty and 35 per cent levy, totalling 70 per cent charges.
The increase in duty, from the present 20 per cent, is in line with the Federal Government’s new automotive policy announced recently by the Minister of Trade and Investment, Mr. Olusegun Aganga.
Aganga said the policy, which had attracted mixed reactions from Nigerians, is aimed at encouraging local production of vehicles and reviving the auto industry.
The prices of imported vehicles are expected to rise astronomically as a result of the increased import duty while some vehicle importers have expressed fears that the new policy could promote smuggling activities. Some analysts have predicted as much as 250 per cent rise in imported vehicle prices from January next year when the new duty regime comes into force.
The Finance Minister’s memo also stated that the duty on buses has also been raised from 10 per cent to 35 per cent without levy.
The minister’s directive dated November 14, 2013, and also sent to Federal Inland Revenue Service, destination inspection service providers namely Cotecna Destination Inspection Limited, Global Scan System and SGS Nigeria Limited stated that approval for the introduction of the new fiscal measures was granted by President Goodluck Jonathan.
On the other hand, as part of the policy, local auto manufacturers, like Innoson Vehicle Manufacturing Ltd, Nnewi; VON Automobile (formerly Volkswagen), Ojo; National Trucks Manufacturers, Kano; PAN Nigeria, Kaduna and other auto makers in the country, will no longer pay duties or levies on their Completely Knocked Down (CKD) sets imported from their overseas partners while Semi-Knocked Down (SKD) components for the local production of vehicles shall attract only five per cent duty without levy.
The memo explained that the new measures, coming about six weeks after the Federal Executive Council approved a far-reaching automotive industry development plan, were designed to boost activities in the industry and also attract foreign investments.
“The above measures are to create an environment to support existing assembly plants and attract other Original Equipment Manufacturers who have expressed interest in Nigeria”, the minister remarked.
Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.