By Bayo Akomolafe
Four years after the national automotive policy was introduced in order to gradually phase out used cars in the country, some auto assembly plants are conniving with port officials to defraud government.
The Senate Committee on Customs, Excise and Tariffs said that the policy had become drain pipes due to the illegal practices among customs officials and auto assembly plants. The policy is an import substitution strategy to reduce importation of vehicles and boost the capacity of domestic vehicle assembly plants.
Past record
Before now, Customs duties paid for the categories of vehicle include cars -30 per cent, buses – 15 per cent, trucks -30 per cent and completely knocked down vehicles – five per cent.
Other taxes are the Comprehensive Import Supervision Scheme (CISS), one per cent, National Automotive Council, two per cent, VAT, five per cent and ECOWAS Trade Liberalisation Scheme (ETLS).
Specifically, the policy was introduced to cut the amount spent annually on importation of vehicles. According to the Director General of the National Automotive Council (NAC), Mr. Aminu Jalal, Nigeria is spending about ?600 billion to import 400,000 units yearly on used and new vehicles.
The policy
Its implementation commenced in July 2014, shortly after it was introduced in October, 2013 with high-priced tariff on imported fully built vehicles.
The policy also offered tariff rebate for CKD and Semi Knocked-Down(SKD) meant for assemblage of vehicles in the country. Because of the policy, importers and car dealers, who formerly paid 20 per cent duty and two per cent levy on new cars, were asked to pay 35 per cent duty and another 35 per cent levy.
Challenge
However, trouble started recently when the Senate Committee on Customs, Excise and Tariffs accused Nigeria Customs Service (NCS) of granting assembly plant owners zero duty on new imported vehicles.
Its Chairman, Senator Hope Uzodinma, during its oversight visit to the Tin Can Island Customs Command, Lagos, complained that the sharp practice among the NSC officials and auto plants had resulted in over N5 billion revenue loss. He explained that apart from the Chinese branding in Nnewi, Anambra State by Innoson Motors, 90 per cent of vehicle importers enjoying the status of assembly plants were traders.
He alleged: “They bring most of these new vehicles into Nigeria through Tincan Island in the name of Complete Knocked Down (CKD) parts.
These vehicles are cleared by NCS and they are cleared at zero duty tariffs. “We want you to place on hold such containers, invite the owners to open them so that for once, we can confront those behind this illicit act.”
Uzodinma explained that these policies, which were meant to facilitate trade and stimulate the economy, had become drain pipes due to the illegal practices.
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