Auto Dealers, Customs On Warpath Over Double Valuation Of Imported Vehicles

The simmering face-off between Auto dealers in Lagos and the Nigeria Customs   may soon blow into a full scale war as the auto dealers seem poised to resist the current trend by some officials of the Nigeria Customs Service to stop cars on the highways, and raid car marts of auto dealers to impound cars they claimed are undervalued at the point of paying customs duties and levy at Nigeria’s borders. 

Many of the car dealers who spoke with Vanguard Motoring said they have been groaning under this practice of “extortion” by some Customs officials who seem to have official backing from the service headquarters as their complaints have consistently fallen on deaf ears. They further said this extortion has led to many of their colleagues closing shops as the Customs officials have forced them out of business as the demand for payment of “variation of the actual value of the car and bribes come in millions of naira”. 

But some senior serving Customs officials who spoke with Vanguard Motoring debunked the claims of extortion by car dealers, insisting that service officials, especially the federal operation units, have the right to stop any “ dutiable vehicle on the highway and make them pay the actual duty value”. According to the Customs officials, most auto dealers deliberately do not pay the actual duty value of cars they bring in, if they even “pay at all”. 

Mr Joseph Atta, Nigeria Customs Public Relation Officer, told Vanguard Motoring on phone that Customs officers are empowered by law to stop any vehicle on the highway or invade any car mart to check if the Customs duties and levy are correct.

 He also said there has been several cases of car dealers who manipulate their vehicle registration process and under-declared the actual cost of their imported vehicles in order to evade paying the actual duties and levy. He further revealed that some importers bring in cars from the Northern borders of the country only to smuggle them to Lagos for registration. 

An auto dealer who begged not be named because, according to him, his car mart will be raided by Customs officials, told Vanguard Motoring that agreeing on the actual value of imported cars is the bone of contention between Customs Service and auto dealers. 

According to him: “If you buy a vehicle for $100, 000 and calculated your 35 per cent duty and 35 per cent levy on that cost, which is $70,000, some Customs officials will stop you on the way and tell you that the car you bought for $100, 000 is $170,000, according to computer generated prices. “So the duty and levy you have paid are below what you ought to pay. These payments run into millions of Naira. These Customs officials will force you to negotiate and if you fail to pay the amount they asked you to pay, they will seize the vehicle and it would take you at least three weeks to get it back. 

This would also cost you, sometimes, about N4 million, which would include the extra money you ought to pay on their arbitrarily generated vehicle price and the cost of visiting relevant Customs offices and personnel that would give you approval to take back your vehicle after the new payment. Why can’t there be a published and public display of car prices by Customs instead of arbitrarily generating prices on the highways?”

 Reacting, a senior Customs officer at the service headquarters in Abuja who pleaded anonymity, queried thus: Can Customs stop a car on the road and after inspecting the Customs paper say the car is undervalued and the owner should pay the duties and levy difference?” 

Answering his own question, he said: “Yes, they can stop any dutiable vehicle with underpayment and refer it to the nearest Customs office to pay the difference. It is common with Federal Operation Unit. Though, this has been condemned at National Assembly to no avail.” He did not stop there. “But it is the same Customs that did the first valuation. Why second valuation of the car on the highway? Why   underpayment?  Most of the Customs documents are either forged by clearing agents or there is false declaration to evade correct duty and indulge in underpayment. Some vehicles may come into the country through our porous land borders and desperately looking for documents for duty payments. “This will result in their making photocopies of duty payments of similar vehicles as their own documents of duty payments. Sometimes there may be a tripartite syndicate backed by influential government officials, Customs and importing agents.

 It is when this illicit deals are exposed by Special Customs Task Force that everyone will be running from pillar to post looking for ways out of the mess as nobody will want to be identified with the crime”. Recall that in January this year, the new Federal Government fiscal policy on imported vehicles took effect. T

he Nigeria Customs Service, NCS, commenced full implementation of the 70 percent tariff on imported vehicles. Consequently, importers and car dealers, who formerly paid 20 percent duty and two percent levy on new cars, began paying 35 percent duty and another 35 percent levy bringing the total tariff to 70 percent as contained in the new automotive policy. With the commencement of the new duties, “SUVs, sports cars, yachts and boats now attract 70 per cent duties. Second-hand vehicles, on the other hand, attract 35 per cent duty. The new policy is in line with the new Economic Community of West Africa, ECOWAS, Common External Tariff, CET, regime”. 

The commencement of the new tariff regime is coming on the heels of ban on land border importation of cars. On Monday, December 5, 2016, the Federal government   issued   a new prohibition order that as from January 2017, there will be no more importation of cars and vehicles through the land borders.