Customs wants import duty on vehicles reduced to 45%

From the present 70 per cent, the Comptroller-General of Customs, Col Hameed Ali (rtd), is seeking a reduction on the tariff on imported vehicles to 45 per cent of the cost of the vehicles.

The Comptroller-General of Customs, Col Hameed Ali (retd.) said this on Monday in Abuja during a media briefing to mark the 2019 international Customs day.

He said that with the high rate of smuggling of vehicles into the country which was caused by the high tariff on imported vehicles, it had become imperative to reduce the tariff to stem the tide, stressing that any new vehicle imported into the country attracts an import duty of 35 per cent and an additional levy of 35 per cent.

This, he noted, brought the total duty payable on such a vehicle to about 70 per cent.

He described the 70 per cent being charged by the government as high, adding that time had come for it to be reduced to 45 per cent.

To achieve this, he said the government could still retain the 35 per cent import duty, while the additional 35 per cent levy could be tinkered with by bringing it down to ten per cent.

This, he explained, would bring the total import duty on new vehicles to 45 per cent.

He said, “We have 35 per cent duty and 35 per cent levy and so if you import a brand new vehicle into Nigeria, you pay 70 per cent duty.

“From what we have done and based on statistics, we discovered that this duty has now driven most of our importers to our neighbouring ports and also it has increased the rate of smuggling into this country of new vehicles.

“Having interacted with our stakeholders, we discovered from what they said that the sudden increase in duty is what is driving them.

“And since 35 per cent duty cannot be tinkered with, the one that can be tinkered with (is  the 35 per cent levy) which is a policy by the Nigerian government. The 35 per cent was put in order to encourage our automotive industry to ensure that it is developed.

He spoke further:  “If we reduce the levy, the volume of cars that would be imported into Nigeria will increase and the revenue from the Nigeria Customs Service will increase.

“So we are advising that the government should review the levy and we are asking that it should be reduced to about 10 per cent.

“If you do that, then it will mean that the collective duty on a new vehicle will be about 45 per cent. That is 35 per cent duty and ten per cent levy.

 

“With that, we will eventually get an increase in the volume of vehicles that are imported, smuggling will be reduced and, therefore, we will realise more revenue and the lives of our people will be saved.”

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