Clearing agents reject Customs’ 15% levy on imported vehicles

Agency Report
Agency Report
FILE: Vehicles

CLEARING agents have rejected the imposition of 15 per cent levy on imported vehicles by the Nigeria Customs Service.

The NCS had, last weekend, introduced a 15 per cent National Automobile Commission levy on used imported vehicles, a decision which didn’t go down well with the clearing agents.

The agents have argued that the NAC levy is mostly on new vehicles and are questioning the rationale behind its imposition on used vehicles.

In a quick response, the service in a statement released by the National Public Relations Officer, Timi Bomodi, said that the move was in compliance with the Economic Community of West Africa Common External Tariff.

The statement read, “On Friday the 1st of April 2022, the Nigeria Customs Service migrated from the old version of the ECOWAS Common External Tariff (2017- 2021) to the new version (2022- 2026). This is in-line with World Customs Organization five years review of the nomenclature. The contracting parties are expected to adopt the review based on regional considerations and national economic policy.

“The nation has adopted all tariff lines with few adjustments in the extant CET. As allowed for in Annex II of the 2022-2026 CET edition, and in line with the Finance Act and the National Automotive policy, NCS has retained a duty rate of 20 per cent for used vehicles as was transmitted by ECOWAS with a NAC levy of 15 per cent. New vehicles will also pay a duty of 20 per cent with a NAC levy of 20 per cent as directed in Federal Ministry of Finance letter ref. no. HMF BNP/NCS/CET/4/2022 of 7th April 2022.

“It is instructive to note that domestic fiscal policy on the importation of motor vehicles and other items is targeted at growing the local economy in these sectors. The focus of NCS is on implementation of these policies in the hope that it achieves its desired objectives in line with National Automotive Policy and other fiscal policies of government.”

However, the President of the African Association of Professional Freight Forwarders and Logistics, Mr Frank Ogunojemite, said that the service had no reason for that increment.

“They don’t have any reason for the increment, they only said that they have reduced the duty to 20 per cent. The Customs does not have the legal right to increase that. This new levy will increase inflation, it will make the products out of reach of the common man.”

Also speaking, the President of the National Association of Government Approved Freight Forwarders, Mr Toochukwu Ezisi, said the service had no right to impose a levy on imported used vehicles.

“Before, it was NAC, but now they have changed it to levy. We have not agreed to that as we are still going back. The levy has no name because they can’t achieve NAC. They pushed it to levy and you can’t achieve levy on used items. We will be meeting for the second time when they call us.”

“For now, we will go by it because you can’t get everything at once to avoid demurrage.”

Also speaking, a member of the Association of Nigerian Licensed Customs Agents, Ojo Akintoye, said while other countries were planning to reduce taxes, Customs in Nigeria was adding more.

“The painful part of it is that when the whole world is planning on how to reduce taxes on goods because of the global challenge with the economy, the reverse is the case in Nigeria. They are adding to the pains of the common people. We are taking a step ahead to see the Ministry of Finance to know the reason for the 15 per cent. The negative effect is that the cost of a smaller vehicle will go up and people can’t get cars.”

He said, “What we want to do first is to engage the ministries. The ECOWAS has agreed that every used vehicle will go on 20 per cent. But the Customs has brought it down to 20 per cent and is adding extra 15 per cent. If you don’t want to obey ECOWAS, go straight and tell them because you can’t rob Peter to pay Paul. So, we want to engage the Ministry of Finance to tell us why,” he said.

Also speaking a clearing agent, George Okafor, said, “The duty is almost the same thing, there is no difference. Before it was 35 per cent, but they reduced it to 20 per cent. But now, they have added 15 per cent, which makes it the same as the old situation.

Samuel Oluwole Obey, a freight forwarder, said, “We were with Customs in Abuja and they said it was not NAC. They called it import levy and they said it was a directive from Federal Government. What they did was that they reduced the duty to 20 per cent from 35 per cent, but they came up with this 15 per cent levy, which means they didn’t reduce anything. So, for me, I do not really think it will have any implications because before now, what we used to pay was 35 per cent, which is what they have returned to.”

A car dealer, Nonso Chukwu, said that sales had been going on as usual, though the prices had been slightly high.

“Business has been going on normal, even though there are increases in the prices. For instance, a car that was N2m before is now N500, 000 higher, but we are still making sales.”

Speaking on the outcome of the meeting, the NCS spokesperson, Bomodi said, “Our meeting was not for NAC, our meeting was for VIN valuation and what we did was to show them what we have done so far in terms of implementing the VIN valuation.

“It was part of the promise we made to them, that before we finally implement, we will call them back to review the data that we have. It ended up very well. The meeting we had has nothing to do with that. Any complain should be directed to the Ministry of Finance. Out meeting had nothing to do with that.”

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