FG CANCELS PLAN TO HIKE VEHICLE IMPORT DUTY

The Federal Government has suspended indefinitely its earlier plan to increase import duty on all used cars. Presidency sources said the suspension was because of the controversy which followed the introduction of 70 per cent tariff on imported vehicles under the new auto policy. While government had set July 1, 2014 as deadline for the commencement of the 70 per cent tariff on imported new cars, the implementation of 35 per cent levy on imported used cars was slated to kick off fully by the end of the year.
The Federal Government introduced the policy with the attendant new increases in duty as a measure of revamping the automotive industry, encouraging local production of vehicles, enhancing entrepreneurial inclusiveness and generating employment for Nigerians.
While trying to discourage the importation of fully- built vehicles, the government approved import duty waivers on imported Completely Knocked Down (CKD) components while Semi-Knocked Down (SKD) components will attract only five per cent duty without any levy.
Towards the effective implementation of the policy, the Nigeria Customs Service (NCS) had issued a circular dated February 28 and titled: ‘Re- Fiscal Policy Measures for the Automotive Industry’ in which it directed all deputy comptroller generals, assistant comptroller generals, zonal coordinator, area controllers and unit heads to start the implementation of the new policy with immediate effect.
According to a key government official who asked not to be named, the Federal Government is rethinking the decision having realised the need to first ensure that the Nigerian auto market is flooded with locally-assembled vehicles that are cheap and affordable to the citizens before fully enforcing the new tariff regime.
The idea of suspending the tariff on imported used cars is also to allow government put in place a sound auto car purchase scheme which will ease people’s access to the acquisition of new vehicles. “You know that the administration of President Goodluck Jonathan is a listening one. While we want to execute some reforms to strengthen the economy and improves the lives of Nigerians, there is need to do that with human face,” the source said.
The new auto policy which had come with it a plan to increase tariff on all imported cars was finally approved by the Federal Executive Council (FEC) on October 1. It is part of the government’s implementation of the Automotive Industrial Policy Development Plan and aims at promoting the manufacture and assembling of vehicles in Nigeria.
Source: New Telegraph