The
Federal Government has released the facts of new duties and levies
payable on imported new and used vehicles as well as imported new tyres
from next year, raising the tariff from 20 per cent to 70 per cent.
Dealers of imported vehicles estimated that the new rate would translate into an increase of 60 per cent on imported cars.
The
Federal Executive Council had last month approved a new national
automotive policy aimed at encouraging local production and assembling
of new vehicles by having an imposition of a high import tariff on fully
built vehicles. But the new rate was not given then.
A
two-page document dated November 14, 2013 and signed by the Minister of
Finance, Dr. Ngozi Okonjo-Iweala, gave the new import tariff on cars as
70 per cent (of the price of each vehicle).
It
stated that the fully built car would attract a duty of 35 per cent and
a levy of another 35 per cent of the price of the vehicle.
Hitherto,
importers/dealers parted with 20 per cent and two per cent as duty and
levy, respectively on new cars. Ten per cent flat rate was also imposed
on commercial vehicles. Although
the new tariff on cars shows an increase of 48 per cent within the old
rate, dealers have estimated that the showroom price of an imported car
will rise by 60 per cent when other variables (costs) are added.
In
other words, prices of imported cars currently being sold between N3m
and N5m will shoot around N4.8m and N8m; while tokunbo vehicles selling
for N800,000 will rise to N1.28m. People
who spoke with the correspondent on the matter on Sunday also warned
that there mightn't be adequate vehicles to meet the demand of the
country next year.
A
sales manager with one of many major dealers said, “Many of us are
skeptical about ordering for new vehicles because we don't know if
people would be ready to pay for about 60 per cent increase on the
cars once the import duty and levy are put into the first cost of
purchase.
“Even the supplies by local plants will obviously be grossly inadequate to meet the demand.”
The
document, with reference number BD/FP/DO/09/189, also stated that fully
built commercial vehicles would attract 35 per cent duty but no levy
imposed.
Specifically,
it stated, “Local assembly plants shall import completely knocked down
(vehicles) at zero per cent duty; and semi-knocked down (vehicles) at
five per cent duty. “Local
assembly plants shall import fully built unit cars at 35 per cent duty
and 20 per cent for commercial vehicles without levy, respectively in
numbers add up to twice their CKD/SKD kits. Imported
tyres would also cost more as from next year as 20 per cent duty and
five per cent value added tax have been added to tyres of cars, buses
and lorries.
“Local tyre manufacturing plants are to import tyres at five per cent duty in numbers add up to twice their production for two years from the date of commencement of production,” it stated.
Similar high tariff will also be charged on used vehicles, according to the document. It added that the Nigeria Customs Service “shall utilize the value of a new vehicle depreciated by 10 per cent per annum, implying 10 years amount of cars and by seven per cent per annum implying 15 year period for commercial vehicles. Either way, depreciation shouldn't be below 30 per cent of the value of the new vehicle equivalent.”
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