There is a sharp disagreement between the Minister of Finance; Dr Ngozi Okonjo Iweala and her Trade and Investment counterpart; Olusegun Aganga over the controversial extension of the implementation date of the levy that is collectable on imported vehicles into Nigeria.
The bone of contention is the position of some stakeholders on the new automobile policy, which favours local assembly of vehicles and seeks to discourage importation, especially of used vehicles.
There is a sharp disagreement between the Minister of Finance; Dr Ngozi Okonjo Iweala and her Trade and Investment counterpart; Olusegun Aganga over the controversial extension of the implementation date of the levy that is collectable on imported vehicles into Nigeria.
The bone of contention is the position of some stakeholders on the new automobile policy, which favours local assembly of vehicles and seeks to discourage importation, especially of used vehicles.
The two ministers are not on the same page, especially as it concerns payment of levy on imported vehicles in addition to payment of duty. The policy had increased duty and levy on vehicles imported to 70 per cent. The commencement date was fixed for July 1, 2014.
About weeks ago, some stakeholders met in Lagos where it was agreed that, a new commencement date was necessary, they agreed on January 1, 2015.
This decision appear not acceptable to the Finance minister, but acceptable to her Trade and Investments counterpart. The former favoured immediate commencement of the policy for the purpose of revenue collection by the Customs, the latter preferred that other essential ingredients of the policy such as the observations of Standards Organisation of Nigeria (SON) about certification of the vehicles and the issue of the lack of readiness on the part of the auto assembly to mass produce the vehicles in commercial quantity.
Our correspondent confirmed that at the end of the forum, which held in Lagos, the National Automotive Council (NAC) approached the Trade and Investments minister, who in turn directed the NAC to raise a memo requesting for an extension.
“It’s the NAC that actually asked for extension on the directive of the minister of trade; the letter of extension of the implementation date was approved by the minister”, one of our sources confirmed.
However insider sources confirmed to our correspondent that, even though there was agreement at the meeting between representatives of the Ministry of Trade and Investment, NAC, and the Nigeria Customs Service (NCS) and stakeholders.
The agreement was that, there was need to extend the date of implementation, due to developments, which border on the level of preparedness on the part of the auto manufacturers who have not been able to meet their roll-out deadlines.
One other issue which tilted the pro-extension lobby group is the declaration by the Standards Organisation of Nigeria that none of the auto assembly plants have yet approached the organisation for the certification and standardisation.
However, our correspondents confirmed that, some manufacturers are expecting consignments of Completely Knocked Down (CKD) components; they warned that, if the shift in date is approved, it may lead to scarcity of vehicles and possible increase in prices of vehicles.
Even though attempts were made to discredit the report that, the Federal Government had bowed to pressure from some stakeholders over the automobile policy, fresh facts have emerged to confirm that, importers of used vehicles will not be compelled to pay the 35 per cent levy until January 1, 2015.
Although the National Automotive Council, which is the implementing agency for the new policy confirmed last week that the Federal Government still retains July 1, 2014 date for full implementation of Nigerian Automotive, but added that, the existing 35 per cent duty on all imported used vehicles will still subsist until January 1, 2015.
A statement to that effect was signed by NAC’s Director, Policy and Planning; Mr. Luqman Mamudu.
However, one of our sources disclosed that manufacturers are currently threatening to withdraw their investments if the extension is granted “without adequate concession and compensation.”
The Ministry of Finance is expected to forward a letter to the Customs approving the extension “any moment from now.”
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