High tariff on imported vehicles here to stay, CGC insists

  • as stakeholders condemn ban on importation of vehicles through land borders

By Odunewu Segun

The Comptroller–General of Customs, Col Hameed Ali (rtd) has insisted that the 70 per cent tariff on imported cars is here to stay, ruling out any possibility in reduction.

Ali stated this at a meeting with a delegation led by the National President of Association of Motor dealers of Nigeria (AMDN), Prince Abibola Adedoyin in Abuja.

Recall that the past administration of former President Goodluck Ebele Jonathan introduced the Nigerian Automotive Industry Development Plan in 2014 with the aim of developing Nigeria’s local automobile industry.

According to the policy, for vehicles coming into the country, the new tariff regime requires the importer to pay 35 per cent duty, 5 per cent VAT, 1 per cent inspection levy and 7 percent port surcharge. For new vehicles, the importer will have to pay additional levy of 35 per cent.

The Comptroller-General said that the NCS has made its position known to the Federal Government that it is the decision of  government to see the need to take a second look at the levy but as regards 35 per cent, it will remain as it is, he added.

Ali said that the association also raised the issue of delays in the system, handling charges and the ease of doing business in customs ports.

The National President AMDN, Mr. Ajibola Adedoyin, said that the policy was a welcome development but the problem was the issue of implementation. He said that the customs duty charged on cars was too high. “We are not saying that the policy of making Nigeria becoming a better country is a bad idea but it’s the implementation that we are not too comfortable with.”

Meanwhile, the decision of the federal government to ban importation of both used and new vehicles through land borders, restricting importation of vehicles to the seaports alone seems to be falling apart as many importers still prefer the land borders because of the financial implications.

According to the Public Relations Officer of the PTML chapter of the Association of Nigerian Licensed Customs Agents (ANLCA), Ayo Sulaiman, the high import duty on imported vehicles at the seaports is putting importers off the ports.

“Why people are running from the seaports is because seaports won’t give the same duty. For instance, Tin Can Customs will give lesser duty and Grimaldi will give a different duty on the same vehicle, with the same model and year of manufacture but at the land border, the duty is the same.”

Ayo called for reduction of import duty on used and new vehicles adding that the reduction would bring back importers to the seaports.

Also, the immediate past public relations officer of PTML ANLCA, Ganny Adeola, said the policy will work only if the government reduces import duty on imported vehicles. “Vehicles are not coming into the seaports and there is no hope they will come because of the high Customs tariff. In the first place, what chased our importers away to neighbouring countries is government bad policy and the bad policy was increment in Customs Duty of 35 per cent on Tokunbo and 70 per cent duty and levy on new vehicles.

The National Council of Managing Directors of Licensed Customs Agents, NCMDLCA, said that the ban of vehicles through land borders was against the international trade laws.

In a petition to the presidency dated January 12, 2017, and signed by the association’s president, Mr. Lucky Amiwero, the restriction of vehicles through the land border came at a very short notice, which contravenes the convention and global best practices on reasonable information across the international community, carrier, and shippers, traders etc. that are directly affected by the decision.

The petitioners explained that vehicles held up at the border are mostly legitimate goods that are legally processed from the land borders as authorized by the Federal Government under the Federal Government Import regime, which import duty is assessed and paid into Federal Government Account legally.