35% LEVY ON TOKUNBO CARS SUSPENDED

 

The implementation of the second phase of the auto policy on imported used vehicles, which was expected to commence last Wednesday, has been postponed indefinitely by the National Automotive Council (NAC).

This is the fourth time in one year that the execution of the policy will be postponed. It was first shifted from July 2014 to January 2015, April 2015 and subsequently to July 1.

Director General of the Council, Aminu Jalal, said that the implementation of the 35 per cent levy would be on hold until the appointment of new minister by President Muhammadu Buhari.

He said: “We have to wait for the minister to come. As far as I know, the ministers are not around. When the new minister of finance comes, we have to brief the person on what we are doing, explain the policy and why we are doing it. The minister will then take up the issue. He has to give the order before it can be implemented.”

Former President, Dr. Goodluck Jonathan, had approved the Nigeria Automotive Industry Development Plan in 2013 to promote local assembly of vehicles and limit importation of cars. Jonathan had slammed an additional levy of 35 per cent, bringing the total tax to 70 per cent from 20 per cent. Former Minister of Industry, Trade and Investment, Olusegun Aganga, had said that the policy was aimed at discouraging importation and encouraging local production of vehicles. While the new duty rate  and additional levy had since been applied on imported new cars, importers of fairly used cars had been exempted from paying the levy.

Just last week, the senator representing Bauchi South Senatorial District, Alhaji Ali Wakili, pledged to champion the reversal of government’s automobile policy, which led to an increment in tariff on imported new and fairly used vehicles. Already, the policy had generated mixed reactions with commercial road transporters and some businesses question the policy in 2014, saying that the implementation was already working positively for the country as some vehicle manufacturers had either started or stated their intentions to start assembling vehicles in the country.

Since Nigeria mooted the auto policy, the Republic of Benin has been a major beneficiary. For example, the total number of vehicles discharged from Lagos ports has dropped to 8,000 units in January 2015, from 27,000 units in January 2014. This 63 per cent decrease is an indication that Nigeria’s automotive policy has begun taking its toll on car imports.

Chairman of Seaports Terminal Operators Association of Nigeria (STOAN), Dr. Vicky Haastrup, had explained that some government policies on importation were affecting the volume of cargo handled at ports. “It must be noted, though, that in the first half of 2014, the volume of vehicles imported was extremely high in anticipation of the introduction of the new duty regime on vehicles. The average number of cars and vans imported for previous years was in the range of 20,000 units per month.” She also explained that in the Cotonou port, the total number of cars and vans discharged in January 2015 was 30,000 units, as against 20,000 units discharged in January 2014. This represents a 50 per cent growth.

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