LCCI asks FG to reduce import duty on vehicles

Director General, Lagos Chamber of Commerce and Industry (LCCI) Muda Yusuf

PHOTO CREDIT: SHIPS & PORTS archive

The Lagos Chamber of Commerce and Industry (LCCI) has asked the Federal Government to slash the tariff on vehicles imported into the country and review the controversial National Automotive Policy.

In a statement made available to SHIPS & PORTS DAILY in Lagos on Sunday, LCCI Director-General, Muda Yusuf, said government should reduce the import duty on new vehicles from 35 per cent to 20 per cent and levy from 35 per cent to 15 per cent to bring the total effective tariff on imported new vehicles to 25 per cent as against the present 70 per cent.

The LCCI DG also suggested a review of the import levy on commercial vehicles from 25 per cent to 15 per cent with additional 10 per cent import duty.

“Import levy on used cars should be reviewed from current 25 per cent to 15 per cent,” he said.

Yusuf said the review has become necessary because the National Automotive Policy has failed five years after its introduction.

According to him, the policy has adversely impacted the cost of doing business, welfare of the people, government revenue and the capacity of the economy to create jobs.

He added that the policy has also penalised stakeholders in the sector that are compliant with extant rules, taxes and tariffs applicable to the automobile sector while 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. Five years into the implementation of the auto policy not much progress has been made even though over 50 vehicle assembly plants licenses have been issued.

“Total annual sales of new cars in 2017 and 2018 are estimated at less than 10,000 units. We have witnessed an increase in the prices of vehicles by 200 to 400 per cent, over the last five years, not many investors and the citizens have the capacity to pay these outrageous prices.

“These unintended consequences and collateral harmful effects on the economy and welfare of citizens are incalculable,” he said.

He also recommended that tax concessions and waivers be given to assembly plants, while semi-knocked down vehicles should attract five percent duty to incentivize domestic vehicle assembly.

He however advocated for the retention of “other incentives” for assembly plants and tyre industries to acquire machineries and equipment as contained in the automotive policy.

He said that patronage of locally assembled vehicles by the government and its agencies should be encouraged and enforced.

“Vehicle purchase finance facility at single digit should be put in place to boost demand for automobiles and age limit of used vehicles should be reduced gradually over time to lessen road safety risks,” he said.

He said his suggestions will ensure optimal utilization of the nation’s seaports and generation of more revenue by Customs.