Authorities at the Nigeria Customs Service (NCS) are routing for a reduction in import duty on imported vehicles from present duty rate of 70 per cent to 45 per cent of the cost of a new vehicle.
Comptroller General of the Service, Col. Hameed Ali( rtd) dropped the hint Monday in Abuja at a media briefing to mark the 2019 international Customs day just as he confirmed the Service realised N4.04 trillion in the last four years.
According to Customs boss, the high rate of vehicle smuggling across Nigeria’s border is influenced by a high rate of vehicle duties.
Ali said at the moment, a new vehicle imported into the country attracts import duty of 35 per cent and an additional levy of 35 per cent, thus bringing the total levy paid on vehicle to 70 percent.
He described the 70 per cent being charged by the government as high, adding that time had come for it to be reduced to 45 per cent.
In achieving this, he said the government could still retain the 35 per cent import duty while the additional 35 per cent levy could be tinkered by bringing it downwards to ten per cent.
This, be explained would bring the total import duty on new vehicles to 45 per cent.
“We have 35 per cent duty and 35 per cent levy and so if you import a brand new vehicle into Nigeria, you pay 70 per cent duty. From what we have done and based on statistics, we discovered that this duty has now driven most of our importers to our neighbouring ports and also it has increased the rate of smuggling into this country of new vehicles. Having interacted with our stakeholders, we discovered from what they said that the sudden increase in duty is what is driving them”
“And since 35 per cent duty cannot be tinkered with,the one that can be tinkered with which is a policy by the Nigerian government, the 35 per cent was put in order to encourage our automotive industry to ensure that it is developed. If we reduce the levy, the volume of cars that would be imported into Nigeria will increase and the revenue from the Nigeria Customs Service will increase”, said Ali.
Continuing, he said, ” we are advising that the government should review the levy and we are asking that it should be reduced to about ten per cent”.
“If you do that, then it will mean that the collective duty on new vehicle will be about 45 per cent. That is 35 per cent duty and ten per cent levy.
“With that, we will eventually get an increase in volume of vehicles that are imported, smuggling will be reduced and therefore we will realise more revenue and the lives of our people will be saved.
On the performance of the Service, he said in terms of revenue, Customs has recorded a steady progression since 2015.
He added that, the sum of N4.04 trillion had been netted into federation account.
According to him, the service generated N904.07bn in 2015, N898.67bn in 2016 as a result of the foreign exchange restrictions on 41 items by the Central of Nigeria.
In 2017, Ali said revenue collection rose to N1.03tn adding that in the 2018 fiscal period, the service generated it’s highest ever revenue figures of N1.2tn.
“Our experiences within these years have shown that with increased level of compliance from our stakeholders and integrity on the part of all operatives, the nation can earn more revenue needed to build the Nigeria of our dream.”
On seizures, he said that the service seized 32,335 items with duty paid value of N93.38bn between 2015 and 2019.