FG Slams 70% Charges On Imported Vehicles

With the Federal Government’s decision to hike the import duty on vehicles into the country next year, automobile companies have started re-jigging their automotive business operations in line with the tariff regime.

The move to hike the import duty was scripted to further push the automobile companies to commerce key investments in vehicle assembly plants in the country.

Executive Director, Toyota Nigeria Limited (TNL), Kunle Ade-Ojo, revealed that his company has commenced the feasibility study towards floating an assembly plant around Lagos, in Epe, Lagos East Senatorial district.

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According to him, the new automotive policy directing the setting up of local assembly plants, in preparation for future vehicle production, was a good idea that needs to be embraced by automobile stakeholders.

Ade-Ojo also explained that increase in car importation next year would bring about reduction in car shipments, while adding that government should be tightening the noose to further increase the import duty for grey market or tokunbo cars.

Executive Director, Nigerian Automotive Manufacturers Association, Arthur Olisa Madueke, said that the move to increase import duty on cars was a clarion call that has been long overdue, as Manufacturers Association of Nigeria (MAN), has been at the vanguard of the policy, negotiations with past governments were without success.

He said the automotive policy was the best move ever initiated by the President Goodluck Ebele Jonathan’s administration, adding that Nigeria is on the threshold of becoming car manufacturing nation.

The Federal Government announced hike in import duty payable on both new and fairly used vehicles to 70 per cent next year from 20 per cent.

A memorandum by the Coordinating Minister for the Economy/Finance Minister, Dr. Ngozi Okonjo-Iweala, sent to the Comptroller-General of Nigeria Customs Service (NCS), Dikko Inde Abdullahi, last week, but made available to the media on Tuesday, directed that imported fully built unit cars shall now attract 35 per cent duty and 35 per cent levy, totalling 70 per cent charges.

The increase in duty, from the present 20 per cent, is in line with the Federal Government’s new automotive policy announced recently by the Minister of Trade and Investment, Olusegun Aganga.

Aganga said the policy, which had attracted mixed reactions from Nigerians, is aimed at encouraging local production of vehicles and reviving the auto industry.

The prices of imported vehicles are expected to rise astronomically as a result of the increased import duty while some vehicle importers have expressed fears that the new policy could promote smuggling activities.

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Some analysts have predicted as much as 250 per cent rise in imported vehicle prices from January next year when the new duty regime comes into force.

The Finance Minister’s memorandum also stated that the duty on buses has also been raised from 10 per cent to 35 per cent without levy.

http://www.ngrguardiannews.com/index.php/business/business-news/139019-automobile-firms-rejig-business-operations-as-govt-slams-70-duty-on-imported-cars