Why Customs had imposed 35% duty on all imported cars as from July 1

NIGERIAN MADE CARS

The Nigerian Government ministers have introduced a 35% duty on imported cars with effect from July 1 as part of the ongoing campaign to limit the purchase of automobiles from abroad and to stimulate local manufacturing.

Under radical plans to reduce the number of cars imported into the country, the Nigerian government has been trying to woo manufacturers to come and establish assembly plants in the country. Second-hand cars known as Tokunbo's are big business in Nigeria with a total of $3.4bn shelled out to purchase imports in 2012 and in a big to reduce this capital flight, trade and industry minister Olusegun Aganga is trying to encourage local production.

In the latest phase of the plan, the government has now directed the Nigerian Customs Service NCS to impose the 35% duty on every imported used vehicle as from July 1. This directive was contained in two circulars numbered BD/FB/09/224 and NAC.993/5, with the latest one sent out on April 28.

Customs officials at Tin-Can Island port and other terminals in Lagos have commenced full implementation of the directive and will introduce the levy on the set date. Under the new policy, fully built unit cars attract the new levy, including commercial buses known as Danfos which hitherto only attracted a 10% duty.

“If the bill of lading is dated not later than March 31, and its arrival date is not later than June 30, you will pay old duty rate irrespective of the date of opening of Form M and letter of credit. Whereas, used vehicles will be imported at 35% duty rate without levy till June 30, this year,” the circular read.

To ensure effective implementation, the new policy has been uploaded into all Customs systems, making it difficult for importers or their agents to pay old rate. Alhaji Olayiwola Shittu, the national president of the Association of Nigerian Licensed Customs Agents, said most agents were happy with the July starting date.

Over the last year, Mr Aganga has begun a charm offensive, speaking to the likes of Toyota, Nissan, Renault and General Motors, encouraging them to come and open plants in Nigeria. Earlier this month, Stallion, Nissan’s exclusive distributor in Nigeria, commissioned its automotive assembly facility to international standards under this programme and began assembling Nissan Patrol SUV's