The National Automotive Council (NAC) is set to reintroduce full implementation of the two percent NAC levy charged on imported automobiles.
The new development was revealed by the Director General of the council, Aminu Jalal while speaking with SHIPS & PORTS DAILY in his office in Abuja recently.
Jalal said the reintroduction of the two percent NAC levy had been approved by the Federal Government since May 2014 after it was gazetted by the National Assembly under the administration of former president, Goodluck Jonathan but had not been fully implemented by Customs.
He however noted that importers who pay additional levies on new or used imported vehicles under the ECOWAS Common External Tariff (CET) regime would not have to pay the two percent NAC levy.
“The NAC levy was stopped in 2007, but it was reintroduced on 24th May 2014. So for any person who pays from that day, the payment is valid but when the new Minister of Finance comes, we will inform him to write to Customs so that they can start implementing it fully but if you pay from 24th May it is still valid.
“Not all importers are paying now because some Customs formations did not capture it fully. If you pay from May 24th, it is still valid because it is the law, it is an act but we feel it is better we wait for the new finance minister to come before we commence full implementation,” he said.
Jalal however noted that auto assembly plant owners who import Completely Knocked Down (CKD) parts would also be exempt from the payment while imports of Semi Knocked Down and Fully Built Units (FBU) will pay the levy.
“We will sit down with Customs to discuss it, only SKD and fully built will pay. Those who pay 35 percent levy will not pay the two per cent levy because there are some who will not pay the levy like those who pay the 20 percent. No importer will pay two levies, you will not pay the 35 and the two per cent levy,” he said.
Meanwhile, the NAC DG has bemoaned the refusal of Customs to recognise concessions given to auto registered assembly plants in the country.
Under the Automotive Industry Development Plan (AIDP), the Federal government gave fiscal incentives to assembly plants that allow them to import Completely Knocked Down (CKD) parts at zero per cent duty and levy while Semi Knocked Down (SKD) parts attract only five per cent duty without levy but importation of fully built units (FBU) attracts 35 percent duty without levy while other importers who are not in the AIDP program pay additional 35 per cent levy.
According to Jalal, “One of the major challenges of the Council is that people will get bonafide manufacturer status to go to Customs for concession but they (Customs) will not send it to their formations. You have to follow up, see them before they send it to their formations.
“When you are given concession, Customs often will refuse to recognise the concession. Take for instance, equipment for production for a long time is five per cent but equipment for auto assembly is zero duty but when somebody tries to import equipment for assembly, they will charge him 35 percent when the production equipment is five per cent even in the concession.
“Even if there is a letter from the Minister of Finance regarding you as a manufacturer, Customs will keep it, they will not send it to their Area Commands where the consignment is. They will keep it here (in Abuja) and people must come to see them before they will send it.
“Normally before somebody gets concession, the industry concerned will write to the Ministry of Finance and they will write to Customs but in our own case, we undertake visit to the Ministry of Finance, Customs and then we will go and visit.
“We will then write a report to the Minister of Finance who will now write to Customs. They are the ones who ask us to go and verify a particular industry we do not choose who to go visit to verify. We are under the Ministry of Trade and so if we say this is a manufacturer they should take our word for it and recognise it but when they refuse we say okay let us go and see them. We will write a report, Minister of Finance will now write, yet they will still say it is not valid,” Jalal said.
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