Import duty on cars reduced to 20% from 35% as a fresh 15% NAC fee is introduced.

Clearing and forwarding agents have rejected the imposition of 15 per cent levy on imported vehicles by the Nigeria Customs Service. The NCS had in few weeks ago, introduced a 15 per cent National Automobile Commission levy  which was originally meant to be paid only on Imported new vehicles on used imported vehicles, a decision which didn’t go down well with the clearing agents.

The agents are questioning the rationale behind the imposition of NAC on used vehicles on the grounds that NAC levy is mostly on new vehicles alone .

In a quick response, the service in a statement released by the National Public Relations Officer, Timi Bomodi, said that the move was in compliance with the Economic Community of West Africa Common External Tariff.

The statement reads, “On Friday the 1st of April 2022, the Nigeria Customs Service migrated from the old version of the ECOWAS Common External Tariff (2017- 2021) to the new version (2022- 2026). This is in-line with World Customs Organization five years review of the nomenclature. The contracting parties are expected to adopt the review based on regional considerations and national economic policy.

“The nation has adopted all tariff lines with few adjustments in the extant CET. As allowed for in Annex II of the 2022-2026 CET edition, and in line with the Finance Act and the National Automotive policy, 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. New vehicles will also pay 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 7th April 2022.

“It is instructive to note that domestic fiscal policy on the importation of motor vehicles and other items is targeted at growing the local economy in these sectors. The focus of NCS is on implementation of these policies in the hope that it achieves its desired objectives in line with National Automotive Policy and other fiscal policies of government.”

However, the President of the African Association of Professional Freight Forwarders and Logistics, Mr Frank Ogunojemite, said that the service had no reason for that increment.

“They don’t have any reason for the increment; they only said that they have reduced the duty to 20 per cent. The Customs does not have the legal right to increase that. This new levy will increase inflation; it will make the products out of reach of the common man.”

Also speaking, the President of the National Association of Government Approved Freight Forwarders, Mr Toochukwu Ezisi, said the service had no right to impose a levy on imported used vehicles.

“Before, it was NAC, but now they have changed it to levy. We have not agreed to that as we are still going back. The levy has no name because they can’t achieve NAC. They pushed it to levy and you can’t achieve levy on used items. We will be meeting for the second time when they call us.”

“For now, we will go by it because you can’t get everything at once to avoid demurrage.”

Also speaking, a member of the Association of Nigerian Licensed Customs Agents, Ojo Akintoye, said while other countries were planning to reduce taxes, Customs in Nigeria was adding more.

“The painful part of it is that when the whole world is planning on how to reduce taxes on goods because of the global challenge with the economy, the reverse is the case in Nigeria. They are adding to the pains of the common people. We are taking a step ahead to see the Ministry of Finance to know the reason for the 15 per cent. The negative effect is that the cost of a smaller vehicle will go up and people can’t get cars.”

News  however has it that as at Wednesday last week,  the 15% NAC fee had taken effect with cars that normally clears for between Five Hundred and Sixty to Five Hundred and Eighty Thousand now clear for an average of Eight Hundred Thousand and what this means for the nation and car shoppers is that car prices will soar again.