Yes, the current rate being charged by the Nigeria Customs Service for import duty is huge; it has made the cost of imported vehicles very expensive. Customs was charging 35 per cent for the importation cost of salon cars while for sport utility cars and other luxury vehicles, about 70 per cent of the value of the car was being charged as import duty. This does not include other charges imposed on the vehicles before they are finally cleared at the port of entry. I blame the Federal government’s automotive policy because it has raised customs duty and levies on imported fairly used cars. In a bid to force people to patronise cars assembled in Nigeria, the governmentraised import duty. The move has led to an increase in the price of imported vehicles. I urge the executives and the legislators to take a second look at the workability of this policy and reduce the amount of duty on imported vehicles. This is the only permanent solution to this issue. It will automatically encourage more people to pay their duty and make vehicles affordable to Nigerians.
The government should bury its head in shame for its deceitful policy on local car assembly which has brought untold hardship and suffering on hardworking Nigerians. How can the government promise local assembly of cars when the requisite infrastructure is not even available in the first place? How far can any car assembly function on generators? Where are the motor parts factories in Nigeria? The so-called car assembly companies understand the game hence their decision to slow down. I feel it is time for government to reduce the import duty because if this is not urgently done, no car dealer will want to import and our ports will be virtually empty.
It is a must that the government reduces the import duty on vehicles to reduce the high rate of smuggling and shore up revenue. I am happy the Nigeria Customs Service (NCS) has asked the Federal Government to reduce import duty on motor vehicles to 45 per cent which would be a relief. According to what the Comptroller-General of Customs said, that new vehicles imported into the country currently attract 35 per cent import duty and an additional 35 per cent levy. This brings the total duty payable on such a vehicle to about 70 per cent. This charge is too high and should be reduced to the lowest rate. I believe that when the duty is reduced, we will eventually get an increase in the volume of vehicles that are imported, smuggling will be reduced and we will realise more revenue and the lives of our people will be saved.
It is high time government reduces the import duty on vehicles. I am glad the leadership of the Customs is also in support of it. I know that if the government listens to calls for this request, it will reduce smuggling because importers have been complaining about high duty rate on imported vehicles. Meanwhile vehicles are being smuggled in without duty payment, making government lose in both ways. For instance, I heard new vehicles coming from Cotonou to Ghana attract five percent duty rate. Ghana reduced the duty rate and made the duty on old vehicles higher in order to discourage importation of old vehicles but here, the Federal government is saying they want to encourage local manufacturers of vehicles but there are no manufacturers in place to meet up the number of vehicles required in Nigeria.
The import duty on vehicles was not meant to come on board in the first place because right from when it was implemented, I didn’t see it bringing any change in the automotive industry in Nigeria. Besides, what was the objective of the policy in the first place because if we can’t assemble or manufacture cars, then we are transferring jobs to foreign countries. There is no reason for this. I definitely call for the reduction of the import duty to make our country earn more revenue to growth of our economy.
It should be reduced because the automotive policy, in its current form, is not sustainable. Since when the policy came into effect only some numbers of licensed assembled companies are in operation. Although the import duty levy was introduced to ensure development in the Nigerian automobile industry, not much has been achieved in terms of car manufacturing except for Innoson Vehicle Manufacturing, which has not really caught the eyes of Nigerians. I am hopeful that if the duty is reduced, it will be beneficial to the Nigeria Customs Services in terms of revenue generation, as the rate of vehicle smuggling will be effectively reduced. Since the inception of the policy, new cars that cost N4million in 2012 now cost over N20 million. So how has that helped our economy in Nigeria? The auto policy review and the directive of the president on closing land borders to car importation ended up achieving unplanned results which has cost high rate of smuggling into the country and made our borders porous by pushing importers to neighbouring countries. This is the time to go back to the policy and give necessary attention especially as regards import duty.
It is in the best interest of the government to reduce the import duty on vehicles because it is not adding value to our economy but rather injuring the nation. Five years after the implementation of the auto policy review, the policy has not only failed to achieve the desired outcomes, it has poorly impacted the cost of doing business, welfare of the people, government revenue and the capacity of the economy to create jobs. The cost of vehicles has risen beyond the reach of most citizens and corporate bodies. The impact has been largely negative with far-reaching consequences.
I do not think the government should reduce the import duty on vehicles because it has cost manufacturers a lot of money to invest in assembling vehicles here in Nigeria. For us to have ease of doing business here, then we should patronize our locally made product. All I want the government to do is to review the policy so that importers will stop bringing in vehicles from other countries. In addition, smugglers would not be able to bring in vehicles through the land borders.
Import duties generally is one of the weapons or instruments used to reduce importation or restrict foreign trade in any country. If properly harnessed, it yields a lot of revenue for the country if the amount is on the high side and discourages the importation of dumping goods. But based on the major reason given by the Comptroller General of NCS which is smuggling of the vehicles into the country due to the fact that the importers are unable to pay the duties because it’s on the high side, the reduction of the import duties is reasonable. It should be accepted based on that cogent reason given by the Customs leadership. This will lead to an increase in revenue generation because more importers will be willing to import motor vehicles since we do not produce any here.
The reduction of import duty on imported vehicles would hamper manpower development in the sector. It will increase unemployment because foreign companies such as TATA and Mandilas could be forced to quit Nigeria. I want to urge the government to endeavour to revive the steel industry to provide materials for local vehicle manufacturing plants so it will enable automobile manufacturers speed up their work. It is best Nigerians patronize our locally made products and stop importing vehicles; the assemblers of made-in-Nigeria vehicles will be encouraged.
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