Automotive policy: FG to soft pedal on tariff hike implementation

Respite may have come the way of Nigerians who fear negative economic backlash as a result of the National Automobile Policy (NAP) introduced by the federal government late last year.

Strong indications emerged yesterday that the federal government may soft pedal on the implementation of tariff increment on the importation of new and fairly used vehicles.
According to an impeccable source, government may not commence implementation of the tariff increment in March as stated in a circular recently sent to the Nigeria Customs Service (NCS) until the automobile manufacturing companies start producing vehicles in Nigeria.
The source said, “A lot of wisdom has come into the National Automotive Policy and the government has been persuaded to have a rethink and with this, I don’t think government will start implementing the new tariff now.”
The source continued: “No matter how good an intention is, it must not backfire and the government is weary of this because the moment they drive importation underground, what will happen is obvious, people will look for an alternative,” he concluded.
However, the Chairman of the Port Consultative Council, PCC, Otunba Kunle Folarin has advised the federal government to ensure the manufacturing of local automobiles before their importation is discouraged.
The PCC Boss said: “Government in its wisdom want to encourage indigenous manufacturing but we have not started manufacturing yet, so why must the government discourage importation when what they want to use to substitute is still in the making?”
Folarin had also said that the policy should be handled like an import substitution policy.

“I think the policy should be like an early warning, informing the public about the intention of the government to revamp the local automotive industry,” he said.
SHIPS & PORTS DAILY recalls that the federal government had in October announced a new policy in the automotive sector. The policy was to encourage local production of vehicles in the country.
To drive this policy, the government through the Ministry of Finance increased the import duty payable on imported vehicles.

The new import tariff on cars was increased from 20 per cent to 70 per cent – 35 per cent duty and 35 per cent levy.