Importers and agents have said that the new version of ECOWAS Common External Tariff (2022- 2026) is counterproductive to Nigerian economy, BAYO AKOMOLAFE reports
Stakeholders have lamented that government was overheating the port economy with unfavourable multiplier effects on the national economy. Nigeria Customs Service (NCS) had recently explained that in line with the Finance Act and the National Automotive Policy, it had retained a duty rate of 20 per cent for used vehicles as was transmitted by ECOWAS with a NAC levy of 15 per cent.
Also, the Service noted that new vehicles would 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.”
Miffed by the new policy, a former President of the Association of Nigerian Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu, said that the introduction of regular wrong policies would continue to have negative impact on national growth.
He noted: “To me, when government continues to take a wrong turn, the economy suffers. Policy somersaults result in negative economic developments. At a time like this, we expect our leaders to step in diligently.”
Also, the Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON) National President, Otunba Frank Ogunojemite, argued that by the new levy, the Nigeria Customs Service had shown a high level of inconsistency capable of betraying the existing trust and undermining the cordial working relationships with freight forwarders and importers. Ogunojemite said that the association was strongly against the collection of NAC levy on used vehicles, saying that it should be limited to brand new vehicles only.
He stressed: “We demand to know why used vehicles should pay NAC levy, and how the money will be appropriated. Dr. Ngozi Okonjo Iweala, during her time, removed NAC levy, which was two per cent then. Why the sudden imposition of 15 per cent and 20 per cent NAC levy on Nigerians?
“Nigerian importers lost over N300 billion in demurrage in the last protest caused by increased target given to NCS by the Federal Government. It is high time Customs commenced constant interface with critical stakeholders on revenue policies to forestall crises in Nigerian ports.”
Also, a former President, National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Eugene Nweke, faulted Customs for introducing the NAC Levy of 15 per cent in addition to the general duty rate for imported vehicles, saying that implementation of the latest version of CET amounted to official highhandedness and lack of consideration for the organised private sector.
For instance, Nweke said Customs should point out the economic impact of the two per cent NAC levy that had been collected for over two decades. Nweke said that the 15 per cent NAC levy was a pointer to the inherent administrative incoherence and confusions on the part of government.
Nweke said:“Customs action depicts the fact that yes, we have endorsed the extant CET, but have also done our own adjustment to accommodate the NAC Levy of 15 per cent additional to the general duty rate for an imported vehicle.
“The 2013 Automobile Policy leading to the issuance of permit to over 130 automobile plants, with its accompany 35 per cent Import Duty and 35 per cent levy on new vehicles and 35 per cent duty with 7.5 per cent Vat on used vehicles – is aimed defeated or actualised, because most of the licensed automobile plants has turned to mere traders, in the face of increasing import volume for used and accident vehicle, mostly so, where the intent of the policy was to evolve a mass production of quality and affordable vehicles for the Nigeria populace?”
However, the Service’s National Public Relations Officer, Mr Timi Bomodi, a Deputy Comptroller, said the rationale behind the new duty on imported vehicles and the collection of National Automotive Council (NAC) levy was because of the review of the ECOWAS Common External Tariff (CET) for 2022 to 2026, saying that this necessitated a downward adjustment of import duty on vehicles.
He explained: “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 WCO 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.”
According to him, the new decisions were in tandem with CET, the Finance Act and the National Automotive Council policy.
He noted: “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.”
Also, Bomodi explained that NCS had activated the use of Chapters 98 and 99 of the CET, in accordance with WCO recommendation for national use by contracting parties, which in our case promotes industrialisation through sectoral and subsectoral incentives for members targeted at economic growth, enhancement of security and minimised consumption of unwholesome goods.
He stressed that in Chapter 98 of the new CET, bonafide assemblers importing Completely Knocked Down (CKD) and Semi Knocked Down (SKD) would enjoy a concession of 0 per cent and 10 per cent duty rate respectively, while within ECOWAS, duty rate for same items would be five per cent and 10 per cent respectively.
There is need by government to sensitise stakeholders before the implementation of new policy in the port industry.