This is not a levy but penalty on detained vehicles by Customs, which ought to have been seized and condemned for auction in accordance with the Customs and Excise Management Act (CEMA).
The 25 percent penalty on detained vehicles is fair enough to the importer instead of seizure as contained in the law. The Customs management team are magnanimous enough by asking the owners to come forward and pay appropriate duty with 25 percent penalty. Even underpayments attract penalties any time a demand notice is issued to an undervalued consignment.
Any goods imported by a person in contravention of the stipulated import procedure without payment of duty or paid at a reduced rate shall be liable to a fine six times the value of the goods or N600, whichever is the greater; and any goods used in contravention of that section shall be forfeited. Any imported goods found, whether before or after delivery, not in compliance or correspond with the import guide line shall be forfeited. The CEMA stipulate that such a vehicle under detention without the required Customs duty will be seizure and forfeited. No reasonable human being will just forfeit his vehicle or consignment to the Government for auction, if he/she followed due process.
Customs is a revenue generating agency. Contravention of rules both in Customs and other regulatory agencies are settled with fines, levies and penalties. It is a more compassionate option as against outright seizure. Payment of penalty on detained vehicles is proper. The only contentious issue is the rate. 25 percent is on the high side. Much as the penalty should serve as a punishment and a deterrent, it shouldn’t be as high as 25 percent.
This directive would only impact on the revenue of the Nigeria Customs Service because the Service is only out to boost its revenue profile. They have seen that they are likely to have problem in the area of auction that is why they brought this up. Meanwhile, they have just succeeded in encouraging those bringing in their vehicles through illegitimate means while some people must have paid through their nose from the seaport. For me, it is not enough deterrent. It is like beating a child with one hand and still patting him with the other hand. It will be enough deterrent if part of these vehicles have been condemned and auctioned to the poor.
Government should begin to create enabling environment for importers to bring in their vehicles through the seaports by crushing out the levy on new vehicles. The rate at which we are importing used vehicles particularly accidented ones is increasing because the duty payable on newer vehicle is too high, it is killing the economy. The moment this is announced, I can assure you that more than 70 percent of these people will divert their vehicle importation back to the ports.
I am not in support of it. We have told Customs that importers should be allowed to bring in new vehicles by reducing the tariff while more duty can be placed on the old vehicles but Customs is not listening. I feel this is the best way that Nigerians can buy new vehicles rather than used vehicles.