Oluyinka Onigbinde
The National Automated Council (NAC) levy, which is a 15% tax imposed on imported vehicles by the Federal Government and collectable by the Nigeria Customs Service, is facing increasing opposition from clearing agents and other stakeholders in the automotive industry.
The levy, coupled with the fluctuation of the foreign exchange policy, has sparked apprehension and discontent among importers and clearing agents who are now calling for the total suspension of the NAC levy.
Recall that the NAC levy was initially introduced as a 2% to bolster indigenous car manufacturing and enhancing productivity in the Nigerian vehicle assembly sector.
However, stakeholders have in a chat with Shipping Position Daily, argued that the levy has failed to achieve these objectives and has only burdened importers without any tangible benefits to the automotive industry.
Checks by our correspondent revealed that in April 2022, the Nigeria Customs Service (NCS) announced an increase in the NAC levy to 15%, collectable on imported vehicles, a development which further added to the already high costs associated with clearing vehicles into the country.
Importers and concerned stakeholders lamented that the NAC levy has added to the financial strain of Nigerians, even in the midst of fluctuating currency rates and economic uncertainty.
In a chat with our correspondent, Ayokunle Sulaimon, the Public Relations Officer of the Association of Nigerian Licensed Customs Agents (ANLCA) PTML chapter, expressed dissatisfaction with the NAC levy. He emphasized that the NAC has not contributed positively to the automobile industry and urged authorities to consider its total suspension. Sulaimon also questioned the utilization of the funds collected through the levy, demanding transparency and accountability.
He said: “The NAC, by definition, is the National Automobile Commission. What brought about the National Automobile Commission by the regime of President Olusegun Obasanjo was that he said they want to use it to improve that sector. They want to use it to enhance productivity in the assembly of vehicles in Nigeria and to discourage importation. You and I know the NAC levy has never added any value to that sector. We have not seen any importance of that NAC. We are not even talking about reduction yet. Let it be scrapped.
“We have not seen anything important for the purpose of that NAC. Initially, we are talking about reduction. But having gone deeply, we discovered that it plays no important role. So it should be scrapped. I stand to be corrected. People come out and tell us what NAC levy has done to us. In fact, the people taking this money definitely need to be investigated, because no one has been able to convince us. We are the payers. We pay this money. Nobody has been able to convince us that this money has been utilized judiciously. I won’t call it a scam, until the investigation proves that.”
Also supporting the call for scrapping of the levy, Festus Ukwu, the National Secretary of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), stressed that there is the lack of progress in the automotive sector despite the NAC levy’s collection. He alleged that none of the automobile or assembly plants in Nigeria are functioning, making the levy irrelevant and unwarranted.
“The NAC levy was meant to help the growth of the automobile industry in the country. Right now, all the automobile industry in the country are not functioning, apart from the privately owned automobile companies like Innoson. The government has not made any improvement even to assemble spare parts, so they are just collecting the money and we don’t know how the money is being utilized. The impact has no effect, so I wonder why we still need to pay for it, because the purpose for which it was introduced has not been felt. There is no automobile or assembly plants functioning in Nigeria. So I support the removal of the levy,” he said.
On his part, Frank Ogunojemite, the National President of the Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), also added his voice to the chorus, calling for an instant removal of the NAC levy. Ogunojemite argued that the 15% levy places an additional burden on importers, especially during a period of high inflation.
“I am in support of the instant removal of the NAC levy, because it is an additional cost to importation; inflation is almost at 30%, so I will advise the government to totally suspend the NAC levy.”
Speaking also, Ojo Akintoye, Tin Can Chapter Chairman of ANLCA, expressed concern about the impact of the fluctuating dollar on importation costs. He urged the removal of the 15% levy to alleviate the pressure on businesses and importers.
“We are paying 15% levy now on both used and new vehicles and to our surprise, we learned that the government is trying to remove the taxes placed on used vehicles. According to what we heard, they said the removal of the 15% levy was part of the executive order of Mr. President for immediate removal. So for now, that we are having a fluctuation of the dollar, if this policy persists in the next few months, I am afraid what will happen to the importation of goods into the country, so if the dollar fluctuation continues like this, we will ask that the 15% levy be removed.”
Chibuike Jones, a car dealer at Berger car market on the Apapa-Oshodi expressway, pointed out that the NAC levy has significantly affected the purchasing power of citizens. With the escalating fuel prices and economic hardships. He also supported the removal of the levy, asserting that it has become increasingly difficult for people to afford new or even used vehicles.
“Is there any civil servant in Nigeria today that can afford a new car, let’s even agree that Nigeria is producing new cars, what is the cost of the new cars, how many civil servants can afford it; part from those in power, what is the impact of the NAC for a common man, is there any justification for the NAC levy, people can no longer afford to buy Tokunbo vehicles, people are not even buying cars anymore”.
However, addressing clearing agents at Tincan Island Ports recently during an engagement, the Acting Comptroller General of the Nigeria Customs Service, Adewale Adeniyi, acknowledged the stakeholders’ concerns.
He assured them that the service would seek a review of the NAC levy and other policies impacting the automotive industry negatively, even as he urged the stakeholders to give the service time to address their concerns.
“I have heard your concerns and the complaints, which your representatives have put across to us. Anybody who is in business wants to make a profit. And there is no crime when you do business and you make profit. However, the understanding that we must have is that your business must be conducted within the framework of the law. The NAC levy and other ones are policies. We would also have a position on it and we would engage the government. The most important thing is for us to listen to you when you express these concerns and then we go and address it,” Adeniyi maintained.
