A Cross Section of imported used vehicles at Berger automobile market last week
Few days after the Comptroller General of Customs, Col Hameed Ali (Rtd) called on the Federal Government to reduce the 35% duty on imported vehicles, so as to check the rising cases of smuggled vehicles into the country, many maritime practitioners including Association of Igbo Maritime Practitioners in Nigeria (ASIMPIN), the Lagos state Chamber of Commerce and Industry (LCCI) and others have lauded the move by the Customs CG, saying that it I a move in the right direction.
Shipping Position Daily recalls that Ali, recently during the unveiling of a Strategic Revenue Growth Initiative which held at the Ministry of Finance stated that vehicles imported into the country attract an import duty of 35 per cent and an additional levy of 35 per cent, bringing the total duty payable to 70 per cent, which he said was too high and fuelling smuggling.
“The 35 per cent is a baseline which is the duty, but the 35 per cent levy is what we think should be tinkered with. We should be able to reduce that to a level that it would be affordable. 70 per cent is on the high side, there is no doubt about that for new vehicles but we cannot touch the baseline of the tax regime,” Ali had stated.
Reacting to this, the President General of ASIMPIN, Eze Damien Obianigwe, told Shipping Position Daily in Lagos last week that the move has shown that Col Ali is a man with listening ear.
He also pleaded with the government to grant the request of the Comptroller General, adding that the reduction in duty will help improve its revenue base as importers would be willing to pay the duty rather than go through the risk of smuggling.
Obianigwe maintained that reduction of duty is in the interest of the government adding that whether they reduce it or not, smugglers will still be doing their thing.
“It is a welcomed development; he has done what he is supposed to do because whether you like it or not the government is losing money in all ramifications. And whether he reduces the duty or not the smugglers are still bringing in vehicles from the land borders. When he reduce the duty, we will compete with the neighbouring ports; I can’t call them our competitors, we are the people giving them the room. Therefore it is good we block the leakage by reducing the duty on the imported vehicles”
“We hope the government approves the request because it is a good move that will help reduce smuggling. That shows the Comptroller General of customs knows what he is doing and he is a listening leader. Importers have been complaining about high duty rate on imported vehicles and yet the vehicles are still smuggled in without duty payment making Government lose in both ways. If we reduce tariff, no importer will be willing to smuggle,” he said.
Also speaking, the Director General of the LCCI, Muda Yusuf, lauded Col Ali, saying that there is an urgent need for the review of the automobile policy as it is not a sustainable policy.
He maintained that a reduction on the duty payable on imported vehicles will create more jobs for Nigerians and more businesses for the concessionaires, especially the ones that invested in RORO ports.
“I think the policy needs a review, it is not sustainable, we should revisit it and reduce the duty both on the new vehicle and used vehicles.
The duty should be reduced, if we do that at least we will see a reduction in smuggling, improvement in customs revenue and more jobs created in the maritime sector. And it will also improve the business of the concessionaires at the ports because a lot will invest in the RORO ports. People at the RORO ports are losing a lot of money because the ports are underutilized because of smuggling, the cost of transportation will also come down. Many of those vehicles are too expensive even the buses; so we should bring it down so that cost of transportation too can come down. If you look at Lagos state now all the transport buses are rickety because they cannot even replace them”, he said.
Yusuf urged the government to also ensure that age limit on imported vehicles are implemented to avoid rickety vehicles flooding our country.
“They should not allow people to bring in rickety vehicles into the country, there should be age limit to what can be brought into the country; at least from the safety point of view. What we want to see this year is a reform in the sector , like I said there is need for the review of the automobile policy”, he said.
Also speaking, an automobile dealer at the popular Berger automobile market, who gave his name as Donatus Chinonso, said: “New vehicles coming from Cotonou to Ghana attract five percent duty rate. The Ghana government reduced the duty rate and makes the duty on old vehicles higher in order to discourage importation of old vehicles. But here, the federal government is saying they want to encourage local manufacturers of vehicles, but there are no manufacturers in place to meet up the number of vehicles required in Nigeria. So the call by the CG is in line, they should reduce the tariff especially for commercial vehicles”.