Thursday, July 3, 2014

FG denies 70% duty on imported cars

… Decries $3.4bn spent on Tokunbo annually
Federal Government has denied media re­port that 70 per cent duty has been imposed on imported used cars, pointing out that the approved duty remains 35 per cent.
Government also explained that those involved in the auto policy programme, includ­ing firms assembling cars in the country and creating jobs, would be able to import cars at 35 per cent while those putting strain on the foreign reserves with no intention to create jobs would pay 70 per cent duty on imported cars to discourage them from trading.

The Minister of Trade and Investments, Olusegun Agan­ga, who gave the clarification at the Federal Executive Coun­cil (FEC) presided by President Goodluck Jonathan, told State House correspondents that the report in the media gave a wrong impression about gov­ernment’s auto policy.
He said, “the article had claimed that the duty on the used cars is now 70 per cent from yesterday July 1, that is incorrect. It is 35 per cent. The report also claimed that all used cars now coming into the country would pay duty of 70 per cent; that again is incorrect.
“For all those in the auto policy programme, all those assembling cars in the automo­tive policy programme, would be able to import cars to meet the gap between production and the demands in the coun­try, they would be able to im­port those cars at 35 per cent, so it is not 70 per cent.
“It is only for those who are putting strain on our foreign re­serves, who have no intention to create jobs, but who want to continue to remain traders, that the 70 per cent applies to and this is to discourage trading. It is to encourage local assembly and job creation and reduce unnecessary pressure on our foreign reserves,” he said.
Aganga who blamed the report on an unnamed group benefiting from an old sys­tem, said any nation that wants to create jobs and boost her industry should be worried that government spends $3.4 billion on used cars importa­tion, creating jobs abroad and depriving Nigerians in that sector from being gainfully employed.
He said, “we should be proud of the progress we have made since that policy was introduced in October. If we don’t implement this policy, the pressure on the economy of this country will be unbearable because we rely heavily on the importation of cars and this is not what we want to use our foreign exchange for.
“Today, we spend more than $3 billion every year importing cars, we spend another $3.2 billion and $3.4 billion import­ing used cars and spare parts.
“With every importation, we are creating new jobs in other countries. Why should we as a country continue with that policy when we have high level of unemployment in our country just because we enjoy riding beautiful cars and yet making sure we are creating unemployment in our coun­try? That is not the best way to grow as a country and for the economy of this country. That is why the policy was put in place.”

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