In this interview with Anozie Egole, the National President of the Association of Nigerian Licensed Customs Agents; Prince Olayiwola Shittu talks about issues surrounding importation of used vehicles into Nigeria. He also talks about the duplication of freight forwarding associations and other issues.
“All the association wants recognition including the ones that were born yesterday and also the ones that have been registered and nobody is hearing about them”
What would you say has been the effect of the ban on importation of vehicles through land borders?
Yes, it has increased the activities in our ports. Gradually it was bad because people feel they can afford to smuggle cars but now it is increasing. There is competition among the dealers that is what is happening in the vehicle importation business. Some of them take their vehicles to neighbouring countries before coming to Nigeria and they will still pay their taxes before proceeding to Nigeria. The tax is called transit tax. That is aside what you will pay when you get to Nigeria. So why don’t the person come straight to the country.
Do you support the ban?
We supported it because it was like a capital flight taking off from the country. Like money going out of Nigeria. What we kicked against was the suddenness, it made some vehicles that were trapped outside the country not to be able to come in, they would have given us pre-information knowing full well that it takes three months for a vehicle coming from US or China to get to Nigeria and like two weeks for vehicles coming from Europe. If they had given three months for people to divert their cars it would have been better. But when they made this ban some of the vehicles were already on transit. And it is additional cost for them to look for a vessel that will bring them from the places where they are trapped down here.
What do you have to say about allegations that clearing agents do not want to pay correct duty on vehicles?
Any import is based on Cost Insurance Freight, the dealer knows how much he bought his vehicle, the agent doesn’t know. What the agent does is to apply to Customs for the Valuation of the vehicle; irrespective of the year, model and whatsoever. You apply for custom valuation for assessment based on the model and the Bill Lading given to you by the importer. Once the agent receives the assessment he gives it to the importer to see how much he has to pay. This is the normal thing and he is duty bound to go and pay the money himself. It is not the duty of the agent to go and pay the money. Any cargo that enters this country whether it is a used vehicle, Tokunbo or the new vehicles that are covered by PAAR, the agent applies for Custom valuation for assessment to show how much duty you will pay. The importer takes the assessment to his bank, pays his money, collects the receipt and gives to the agent.
People may be asking why importers do not want to go and pay the money by themselves based on Customs Assessment, the reason is they want to short change the system, they do not want to pay correctly. That is the reason they do not want to pay 100%. They will look for unscrupulous agents to ensure that the assessment they are bringing is not correct. If you are supposed to pay N3million; that is full duty; the importer will tell you that he can only pay half of the money. Which means they do not want to pay the money, they will now look for an agent that will go and declare something different from what the car is, so that he will get a reduce amount of money to pay. For example if your vehicle is 2016 he might turn it to 2010 to be able to collect the small money. The dealer knows he is not paying the correct amount. That is why you see when the vehicle eventually manages to come out; it will be impounded by the FOU. Like the new Comptroller General of Customs, Col Hammed Ali said that any vehicle that did not pay correctly, when they look at the ‘C’ number and you find out that the vehicle was not properly registered, the vehicle will be seized. So you find out that dealers are the one not ready to pay government.
That is why we are advocating that for importation of vehicles, there should be a platform were once you insert the VIN (Vehicle Identification Number) the amount you are supposed to pay comes up. When you go and pay your money, you are free. It is not the work of the agent to pay the money, but that of the importer. Dealers are responsible for the short payment on the customs duty, otherwise they are supposed to demand for the assessment made by customs and go and pay the money themselves through their banks.
What plans do you have for vehicles that were trapped at these borders?
There are shipping lines that can bring them to Nigeria but it will add more to the cost. That was why we wanted three months to be given before the implementation. Three months is not too much so that the incentive will be that the ones that have gotten there will come through the border not smuggled. Because we have discovered that more than 60% of those vehicles coming to Nigeria are smuggled. If you come through the approved route you pay your duty. Anybody that approaches a shipping company can arrange for a vessel to bring those vehicles that have been abandoned there. Some vessels coming to Nigeria stop at those places, so if you know those vehicles that are trapped there, you can discuss with the shipping company so that as they are stopping there, they will be picking your vehicles, because some of these vehicles are on transit to Nigeria. The dealers should make the arrangement with shipping companies.
Does the present state of the forex affect vehicle importation business?
Majority that brings in these vehicles make alternative financing arrangement. For example, CBN will not give you money for you to go and bring in used vehicles. So when people are complaining about forex, they are for imports that have value occurring exchange. The money have to go through forex to Central Bank, but most car dealers are people who want to use the car to send money back to their relations. When they bring in the car, it will be sold and the money given back to their relations.
There are reports that activities have returned back to normalcy, but the bulk of the cars coming into Nigeria now are accident cars, do you agree?
When government stopped the vehicles suddenly from coming in and then because of the forex people who would have bought sound vehicles and also the disparity in duty payment have made them to say that instead of buying good vehicles they will buy accident cars with the part and bring it to Nigeria and fix it here.
In one sense, it is giving our mechanics work to do, so that is part of the labour. But at the end of the day, Nigerians don’t even like accident cars because you know that no matter how they fixed it, it can not be like the one from there. They always impose a very high duty that is even higher than the one that is obtained in Ghana. So we also propped a method which we have given to the government but they didn’t take it. We told them that they should make it in such a way that the older your vehicle the more duty you pay and the newer your vehicle the less duty you pay. That will give us the opportunity that within a span of three to four years, you will be seeing new cars on the road. If you go to Ghana you will not see all these old cars on the roads. Because the older your vehicle the more money you pay. But here when they put devaluation value on it for a car like 10 years, you find out that you are paying almost nothing, so why will you go and bring a sound car and pay higher? People prefer to go and bring in an old car. I am telling you that if you get a 2010 car, it will last longer than a 2005 car. What people don’t know is that vehicles have expiry date. Those parts are not meant to last forever.
Would you say your association was satisfied with the recent visit of the CG of Customs?
I don’t know what people mean by impression on the visit of the CG. He is not the first to visit us. He came because there is crisis, people are complaining that things are not moving well in the ports and government is losing money. And you know that probably the CG could just sit at Abuja and invite us; but it is better for a few to come from Abuja that many going to Abuja. It is a necessity for the CG to have quarterly meetings with the licensed custom agents. I am not talking about the crowd; it is the people that customs have licensed. You licensed people to go and do a job on your behalf, so why don’t you want to see them. So there is nothing bad there, I have read where people are writing that we did a red carpet for him. A CG of customs does he not deserve a red carpet when he is coming to a place for the first time? When the former, CG, Dikko was on board and we went to visit him, they organized a red carpet for us and he came down himself to receive us at the car park. That did not stop us from telling him the truth which he was very grateful for.
Some other associations are saying that they were not represented in the CG’s visit. What is your take on that?
I don’t know and I don’t want to speak on behalf of anybody. You know the position of ANLCA; we are the oldest and the biggest. We also represent more interest than any other association. I am not the one to accord recognition to any association. All the association wants recognition including the ones that were born yesterday and also the ones that have been registered and nobody is hearing about them.
Do you support the registration of more association by CRFFN?
They are the cause of the multiplication of associations. The idea of the CRFFN is to find a way to unify and prevent multiplicity. I want you as a journalist to know that there was a time we had up to 10 different associations. It is an inborn thing for everybody to be a president. But now I think is better when you have a solid association. I am not against association but when you are having more it doesn’t make sense. Look at ICAN, it was the only accounting body in Nigeria at a time, but ANAN came up there was a struggle and tussle they put into considerations that someone needs to have a choice. But when you have multiplication of choices, you make a mess of the whole thing.
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