Car dealers lament FG’s failure to review vehicle import duty

Ban on importation of vehicles will increase smuggling - Don


Auto dealers have lamented the failure of the Federal Government to review Customs duty on imported vehicles following the suspension of the controversial National Automotive Policy.

The Federal Government had last month announced the suspension of the National Automotive Industry Development Plan created in 2013 by the administration of former President Goodluck Jonathan.

The Minister of Industry, Trade and Investment, Adeniyi Adebayo, said that the government was already planning to send a fresh auto policy bill to the National Assembly that would contain the inputs and views of auto stakeholders, private sector operators and interests of Nigerians in a bid to achieve inclusive industrialization growth in vehicles manufacturing in Nigeria.

The policy raised the import duty of vehicles from 10 percent to 35 percent with an additional 35 percent surcharge, making importers pay a total of 70 percent of the cost of a new car as import duty.

However, one month after the suspension of the auto policy was announced, the Federal Government is yet to take any decisive step on reviewing the import duty as vehicle importers still pay 35 percent duty and 35 percent levy.

Speaking on the development in a chat with SHIPS & PORTS, the Chairman of Progressive Car Dealers Association, Chinedu Ukatu, wonders why importers should still be paying the 70 percent tariff on imported vehicles after the announcement of the suspension of the policy.

Ukatu said, “The government said they have suspended the policy but when you go through the port to clear your vehicles, you still pay 70 percent and nobody is telling us why a policy has been suspended and we are still paying the same tariff. We have tried to get clarification even from Customs and the Ministry but it appears government is confused somewhere.

“Government should look at the policy holistically. If they have suspended it, then let there be clarifications on what they suspended and what they did not suspend so that we will know where to start the dialogue from. Government should come out clear on this.”

Ukaatu who also faulted the imposition of 25 percent levy on detained vehicles by Customs, said the directive is an indictment on the Customs operatives posted at the borders from where most of the vehicles are smuggled.

“It is the lapses of the Nigerian government because you have Customs at the borders. The question we keep asking them is where are those Customs officers when these vehicles were smuggled in? It is the same Customs that will undervalue the vehicle and in some cases assist the importers to bring them in. I think something is wrong somewhere. If the government looks into the tariff and it is affordable, nobody will beat the system. Telling people to come and pay 25 percent after they might have been extorted huge sums of money to smuggle the vehicle is not advisable. Customs is only indicting itself by clamping down on car marts,” he said.

Also speaking, an auto dealer and member of the National Association of Automobile Marketers (NAAM), Biodun Ayeni, said while the government develops a good strategy for the new auto policy, it is expected that the tariff would also be reviewed to allow importers pay 20 percent duty on vehicles.

According to him, “Government has only short-changed itself with the auto policy because they are losing so much revenue. The government has acknowledged that the policy has failed woefully, so while they have agreed to review the policy, they should also go back to status quo on the old duty.

“Now the roads are filled with dented cars because prices of new cars are on the high side. It will be nice if they revert to the old duty of 20 percent while a good strategy is put in place to get the policy back and better.”

When contacted, the Public Relations Officer, PTML Area Command of the Nigeria Customs Service, Yakubu Muhammed, under whose command the largest vehicle importing terminal, PTML operates, said the command has not received any circular from the Customs headquarters on adjustment on tariff on imported vehicles.