New Telegraph

Vehicles Import: FG’s 15% council levy crisis heightens

Following the expected delivery of 2,300 units of used vehicles this week in six roll-on roll-off vessels, the National Automotive Council (NAC)’s 15 per cent levy has sparked fury among Customs agents and importers who said that the levy should be imposed on new vehicles instead of used ones.

 

Within three years, they have imported N834.6 billion ($1.44 billion) used vehicles from United States. The used vehicles were ferried to the country between 2019 and 2021.

 

The Customs agents said that failure by the local vehicle assemblers to meet the country’s target was responsible for the huge amount spent on importation of old vehicles as data obtained from International Trade Administration (ITA) revealed that 1.3 million units of used vehicles were shipped into the country in 2019 and one million units in 2020.

 

Vice President of the Association of Nigerian Licensed Customs Agents (ANLCA), Kayode Farinto, said that National Automotive Council (NAC) levy being paid on used vehicles should be slammed on brand new vehicles rather than  the used vehicles languishing at the Port and Terminal Multiservices Limited (PTML), Tin Can Island Port.

 

He stressed the need for the suspension of the National Automotive Council (NAC)’s 15 per cent levy by the Federal Ministry of Finance.

 

The vice president noted that the government auto policy had failed, saying that local producers could not meet the number of vehicles needed in the country. Farinto noted that the 15 per cent levy was an aberration, adding that NAC was two per cent of the Cost Insurance and Freight (CIF) on new vehicles or new spare parts. He explained that NAC was a policy formulated to protect the country’s local assemblers so that they would be able to produce Nigeria-made vehicles.

He said: “What we have are Semi Fully Built (SFB); they bring parts in and put them together and they say they are produced in Nigeria. We don’t have local producers that will meet our demand, rather, what we have is people benefiting and enriching themselves from the policy.

 

“I told them at Abuja that the auto policy is a failure; the auto policy was actually formulated to fail, because we are not producing any vehicle spare part and the policy has been on for a long time with a lot of billion of naira waived for local vehicle assemblers. Local assemblers haven’t been able to meet local demand despite government’s intervention.”

 

Meanwhile, the National Automotive Design and Development Council (NADDC) has said that some of the 31 licensed producers of cars, trucks and buses operating in the country with a combined installed capacity of 205,000 vehicles a year had relocated to Ghana.

 

The council complained that only about seven companies were assembling due to huge funding, infrastructure and capacity gaps. Due to these challenges, it noted that auto makers were moving to Ghana to set up assembly plants with plans to export the vehicles to Nigeria.

At the port, Nigerian Ports Authority (NPA)’s shipping data revealed that Grande Gabon with 350 units; MSC Cris- tiana, 400 units and Grande Tema, 400 units will arrived this week, while three of the vessels laden with 1,150 units have been more at the terminal with MSC Immacolata leading 400 units; Grande Costa D’avorio, 350 units and Grande Abidjan, 400 units.

 

In March, the Port and Terminal Multi-services Limited (PTML) and Five Star Logistics at Tincan Island Port took delivery of 2,150 units of used vehicles from six ships. Also, 30 units of the used vehicles were offloaded at Five Star Logistics terminal, while 1,850 were discharged at PTML.

 

It added that Grande Atlantico offloaded 350 units, followed by Grande Dakar with 400 units; Grande Luanda, 400 units; Grande Benin, 350 units and Grande Togo, 350 units.

 

It would be recalled that Nigeria Customs Service (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. In the new version of ECOWAS Common External Tariff (2022- 2026), Customs said that new vehicles would attract 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 April 7, 2022. Data by Customs revealed that between January and September 2021, a total of 171,491 units of vehicles were imported through the Port and Terminal Mult-services Limited alone.

 

According to NCS, PTML Command, the figure was 74,130 higher than the 2020 imports of 97,361 vehicles.

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