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Nigeria to begin reduction of duties on imported vehicles

by Business News Report

The Nigerian Customs Service, will next week, commence the reduction in the duties on vehicles and tractors from 35 to about 10 per cent. This is according to the Nigeria Customs Service (NCS). Comptroller-General of Customs, Hameed Ali, said that the management of the service was expecting an official communication from the finance ministry on the matter any moment from now. Ali reminded that the vehicle tariff reduction, as contained in the 2020 Finance Act, was initiated by the NCS to ease the cost of transportation in Nigeria.

He said, “We are the proponents of the new tariff. I’ve been torn apart by many people criticising it, saying I used my connection to get it done. But it is in the overall interest of Nigeria. Now, it has become law. We are now waiting for the finance minister to give us a formal conveyance of that Act. Once we receive it, we commence implementation immediately and inform our commands. We are hoping that latest by next week, it will become operational.” The Federal Government had in 2015 imposed the 35% import levy on cars to encourage local assembling of vehicles. Recall that the development came two years after the government had raised the import tariff on vehicles from 22% to 70%, which was made up of 35% duty and 35% levy.

There was no better time to review the import tariff on vehicles than now. Unarguably, the amount charged by the Nigeria Customs Service (NCS) for import duty is huge, which has made the cost of vehicles expensive. While the government imposed a costly levy on the vehicles to force people to patronise cars assembled in Nigeria, some questions that begged for answers may have made why the import duty has been effective. Some of the questions are -How can the government promise local assembly of cars when the requisite infrastructure has not been made available? How far can any car assembly firm function on generators? Where are the motor-parts factories in Nigeria?

This publication thinks it’s a smart move for the President Muhammadu Buhari-led government, as the move will curb the increasing rate of smuggling and at the same time, shore up the country’s revenue.

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