Home Business LCCI frowns at arbitrary seal up of auto dealers business in Lagos, Abuja

LCCI frowns at arbitrary seal up of auto dealers business in Lagos, Abuja

by Business News Report

Lagos Chamber of Commerce and Industry has frowned at the arbitrary closure of major auto dealers business in Lagos and Abuja by Customs officials. In a statement signed by the Director General Mr. Yusuf Muda the Chamber said “Three weeks ago, offices and show rooms of leading automobile dealers in Lagos and Abuja were sealed up by operatives of the Nigerian customs service.  Some of these dealers are leaders in the industry, representing reputable global brands in the country.  They are members of the organised private sector representing a strong segment of the auto industry on account of their contribution to tax and customs revenue.  The main objective of the Nigeria customs action was to undertake an investigative audit regarding import duty payments by these firms.  Some of these outlets have been unsealed.

“The Lagos Chamber of Commerce and Industry [LCCI] is a strong advocate of good corporate governance and compliance with statutory requirements by businesses. There is nothing wrong with an audit exercise to validate compliance with extant rules and policy of government.  What is not right is the ominous and intimidating manner the exercise was carried out.  The premises of the companies were sealed for about three weeks, paralysing their entire operations.  We believe that the audit exercise could still be carried out without the sealing up of the business premises of the companies for that length of time.  Regulatory and enforcement powers should be exercised with due propriety and courtesy.  It is imperative for regulatory and enforcement institutions to extend due courtesy to investors in the economy in their quest to validate compliance or otherwise of statutory requirements.  Investors should not be treated as culpable when infractions have not been proven against them.  Verification processes should be done with minimal disruptions to the operations of companies. 

“Sudden sealing up of companies for about three weeks has profound consequences for businesses which include the following: reputational cost to the company with implications for the goodwill of the company; disruption of business transactions of the company; loss of revenue as result of the disruptions; risk to international and domestic business relations resulting from perception problems created by the sealing up of business premises, especially for dealers of leading global automobile brands; Huge embarrassment to the management and shareholders of the company and negative signalling effect to investors. The LCCI would like to appeal to regulatory and enforcement agencies to demonstrate greater courtesy in their interactions with investors in the economy.  Investors are critical stakeholders in the economy creating jobs, generating revenue, and stabilising the social environment through the engagement of citizens. This is in line with the current aspiration of government to create an investment friendly environment and the ease of doing business agenda of government.  Hostile regulatory actions are not in consonance with the quest for job creation and poverty reduction.  

“Disputations around valuation and classification of consignments have become a recurring issue of concern to the private sector. It is a matter that has assumed a critical dimension creating disruptions and uncertainties in the international trade process.  The system is characterised by a great deal of arbitrariness resulting in major cost distortions for many private sector players.  We request that the presidency in conjunction with the ease of doing business office should come up with a framework for valuation and classification which is fair, equitable, transparent and consistent.  There is also an urgent need for an independent dispute resolution framework to speedily take decisions on disputes arising from valuation and classification of consignments. Seeking redress on valuation and classifications issues under the present arrangement is frustrating, distressing and agonising for importers.  It is inappropriate for the Nigeria customs service to be the same institution that would adjudicate on valuation and classification disputes between the importers and the customs.  It is not in consonance with the principles of natural justice. It is unfair for the 

“Nigerian customs service to be a judge in its own case. Additionally, the government should underscore the trade facilitation role of the Nigerian customs service as a key performance indicator.  There is currently a disproportionate focus by customs on revenue generation, a disposition which is hurting investors and the citizens.  The drive to meet revenue targets is pushing up cost of intermediate products and other inputs imported by investors.  This also invariably reflect in high prices of goods and services in the economy”.

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