Clearing agents operating at the nation’s seaports have called for the reversal of the 15 years age limit imposed on used tokunbo vehicles coming into the country.
The call by agents was due to the sharp drop of vehicle importation into the country in the last few months.
According to importers and clearing agents, the purchasing power of Nigerians have dropped owing to the widening foreign exchange rate and as such stating that many Nigerians may not be able to afford vehicles that are 15 years and below.
They noted that owing to the widening gap difference there is a need for the government to reconsider the barrier of the 15 years age limit or continue to lose revenue to other neighboring countries who allow older cars to come into their countries.
The clearing agents further lamented that despite the 15 years age limit by the federal government, the Vehicle Identification Number (VIN) only recognizes vehicles of 12 years and below, stating that they are made to pay the same duty for vehicles of 15 years as the same as that of 12 years.
Meanwhile checks by our correspondent revealed that Nigeria has one of the highest age limit barriers in Africa and other parts of the world.
For instance In Ghana importation of used vehicles older than 10 years are placed on ban to encourage international companies to set up local plants in the country. The law signed in April 2020 also banned the importation of cars which have been involved in accidents which dealers bring in and repair to provide even cheaper options to consumers.
Also in Kenya, the Kenya Bureau of Standards (Kebs) last year set an age limit of eight years for importation of used cars into the country.
Our correspondent also gathered that the age limit for used vehicles imported into Cote d’Ivoire is seven years as against the 15 years age limit in Nigeria. Findings also revealed that Togo has the same age limit for used vehicles imported into the country as Nigeria.
Further findings by our correspondent revealed that Benin Republic and South Africa are the only two countries in Africa with no age restriction for importation of used vehicles.
In a chat with Shipping Position, the Public Relations Officer of the PTML chapter of the Association of Nigerian Licensed Customs Agents (ANLCA) Ayo Suleiman, blamed the drop in importation of vehicle on economy and fiscal factor policy, while calling for a review of the 15 years age limit set by the federal government on used vehicles.
He also blamed the introduction of the 15% National Automotive Council (NAC) levy imposed on used vehicles and the high exchange rate for the drop in importation of used vehicles in the country.
He said “Drop in the importation of vehicles is as a result of the cumulative factor; first we have that of the economy factor and that of fiscal policy factor. For the policy factor, we all know that an average Nigerian find it difficult to buy an average tokunbo car in the Nigeria market, because before the government policy of 15% NAC levy and VIN policy, you can get a corolla for N2.3 million, as it is now you might not get a good corolla for less than N3.5 million however what is our economy strength in terms of purchasing power.
“Then about the government policy at the point of introducing VIN valuation government brought in 15%NAC levy the NAC is a moribund commission yet we don’t know where this 15% is going now, in other African countries if you look at the Common External Tariff (CET) you will see that most of it are 20% but the basic thing is that apart from the General Agreement Tariff (GAT) every country is at liberty to domesticate additional percentage either for revenue or for control, but the totality of what we have now is 20% and 15% totaling 35% coupled with the problem of artificial intelligence because VIN valuation is artificial intelligence.
“If you come to our terminal now at Grimaldi, if a vessel brings in 500 vehicles the highest they will drop is 250 the remaining 250 will go back to Cotonou and be rest assured that the remaining 250 that went to Cotonou, Nigeria is still their final destination through unapproved routes, so who is fooling who? Where is the duty going to? The duty is going to other countries why we are the losers because the government failed to listen to stakeholders, we have clamoured that the 15%NAC levy should be return to 5% with that we would have been able to do a lot.
“Then about age limit in South Africa you might have endless, in Ghana you might have age control, but in Nigeria the purpose of setting age limit is to discourage the issue of bringing in scrap vehicles, but this issue of 15 years is not even being recognized by VIN valuation what VIN valuation recognized is 12 years, because of rebate on percentage, their rebate does not cover that of 15 years, but this is issue of arithmetic they can work it out to cover that of 15 years vehicle. So technically bringing in 15 years vehicle into the country is not economically encouraging because you will pay the same duty of that same brand of vehicle of 12 years and as we all know as at last week a dollar was over N900 i think it got to a point in parallel market that a dollar was sold for N1000, and these are some of the factor affecting, and when you get into the terminal you will see a lot of abandoned vehicles especially Mercedes brand, because who will be able to pay for duty for a Mercedes 2010 where you will be spe
nding over N4 million as duty, what is our purchasing power, a director in the Ministry cannot buy Mercedes of 2010 and even the Customs knows now that there is a sharp drop in revenue due to low importation, ideally towards the end of the year like this we supposed to have a kind of boom but now reversed is the case.”
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