The Nigeria Customs Service (NCS) has explained the rationale behind the new duty on imported vehicles and the collection of National Automotive Council (NAC) levy.
National Public Relations Officer (PRO) of the Service; Mr Timi Bomodi, a Deputy Comptroller, explained that there is a new ECOWAS Common External Tariff (CET) for 2022 to 2026, and that this necessitated a downward adjustment of import duty on vehicles.
Bomodi explained that, “on Friday the 1st of April 2022, the Nigeria Customs Service migrated from the old version of the ECOWAS Common External Tariff (2017- 2021) to the new version (2022- 2026). This is in-line with WCO five years review of the nomenclature. The contracting parties are expected to adopt the review based on regional considerations and national economic policy”.
He added that in view of this, “the nation has adopted all tariff lines with few adjustments in the extant CET”.
According to him, the new decisions were in tandem with the CET, the Finance Act and the National Automotive Council policy.
Explaining further, he added that, “As allowed for in Annex II of the 2022-2026 CET edition, and in line with the Finance Act and the National Automotive policy, NCS has retained a duty rate of 20% for used vehicles as was transmitted by ECOWAS with a NAC levy of 15%. New vehicles will also pay a duty of 20% with a NAC levy of 20% as directed in Federal Ministry of Finance letter ref. no. HMF BNP/NCS/CET/4/2022 of 7th April 2022”.
“It is instructive to note that domestic fiscal policy on the importation of motor vehicles and other items is targeted at growing the local economy in these sectors. The focus of NCS is on implementation of these policies in the hope that it achieves its desired objectives in line with National Automotive Policy and other fiscal policies of government”.
He said, “the NCS has also activated the use of Chapters 98 and 99 of the CET, in accordance with WCO recommendation for national use by contracting parties, which in our case promotes industrialization through sectoral and sub-sectoral incentives for members targeted at economic growth, enhancement of security and minimized consumption of unwholesome goods”.
“It should also be noted that the automotive industry, bonafide assemblers, manufacturers of auto spare parts and other local manufacturers enhance technology transfer and skill acquisition, create jobs and increase per capita income”, the Customs spokesperson added,
Explaining further, he said, “In Chapter 98 of the current CET – Bonafide Assemblers importing Completely Knocked Down (CKD) and Semi Knocked Down (SKD) are to enjoy a concession of 0% and 10% Duty rate respectively. While within ECOWAS, duty rate for same items are 5% and 10% respectively”.
Insisting that, the current CET takes immediate effect, he also added that, incentivizing the efforts of local players in the automotive industry and bonafide assemblers through policy interventions guarantees a win-win situation for the nation in the long run.
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