The Federal Government has released
the details 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 with 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 cost of each vehicle).
It stated that a fully built car
would attract a duty of 35 per cent and a levy of another 35 per cent of the
cost 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 over 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 up to N4.8m and N8m;
while tokunbo vehicles selling for N800,000 will rise to N1.28m.
Those who spoke on the issue on Sunday also warned that there might not be enough
vehicles to meet the demand of the country next year.
A sales manager with one of the 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 the about 60 per cent increase on
the cars when the import duty and levy are added to the original 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 equal 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 placed on tyres of cars, buses and lorries.
“Local tyre manufacturing plants are
to import tyres at five per cent duty in numbers equal 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 use the value of a new vehicle depreciated by 10 per cent per
annum, implying 10 years period of cars and by seven per cent per annum
implying 15 year period for commercial vehicles. In either case, depreciation
should never be below 30 per cent of the value of the new vehicle equivalent.”
Tags
Society
Good move...there are alwedy so much cars on the street
ReplyDeleteI hereby refer 2 d above writer. Bros, hw many hv u got? Even if u ar as rich as dangote, wont u allow d poor in d country 2 hv 1. Am nt even sure dt u hv 1 nd dt is d reason u want d road 2 b empty. Ar u nt tired of riding a motor cycle?
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ReplyDeleteAnonymous 08:36am,dat was a gud reply.
ReplyDeleteThe benefit of the new policy will be Cotonu Port. Just watch.
ReplyDeleteThe benefit of the increase in duty will go to Cotonu Port. Just mark it. It has been tried before and we all know the end result.
ReplyDeleteThis GEJ govt iS sick, anytime they drink
ReplyDeleteOgogoro they come up with funny policies.
Plenty jobs for smugglers and money for
Custom boys. Visionless president.
Well done! I am gratified that you have shared this important news with me. Thanks!
ReplyDeleteI wonder the power station that will power these factories. Innoson and Co have built empty assembly plant to avoid duty on their imported fully built low quality vehicles while sending returns to President and his boys. It's unfortunate. This will only encourage smuggling and enrich Benin Republic.
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ReplyDeleteof vehicle of your choice?
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