Customs Debunk 10% Vehicle Duty Increase

BY EGUONO ODJEGBA

The Nigeria Customs Service (NCS) has debunked allegations by a section of the freight business community that it has raised the duty on imported vehicles by 10 per cent, noting that the power to do so does not lie expressly with it.

Reacting to report of above allegations in a daily newspaper, the National Customs Public Relations Officer, Comptroller Timi Bomodi faulted the report as untrue and misleading, adding that other factors independent of the service are considered before such action is taken.

Bomodi further explained that all such matters have been collapsed into the VIN VALUATION regime, whether the issues have to do with increase in the duty of imported vehicles or the 10 per cent yearly depreciation value on imported used vehicles.

In a telephone text message to our reporter’s inquiry on the subject matter, the customs image maker said, “It is false. We cannot on our own without recourse to fiscal policy Jack up duty rates.

“VIN VALUATION has effectively taken care of depreciation and there are no issues”, he said.

Clearing agents under the aegis of the National Association of Government Approved Freight Forwarders (NAGAFF) which made the allegation has raised an alarm that the development may lead to vehicles terminals congestion at the nation’s seaports.

The news report which quoted NAGAFF executive officials weekend accused the service of effecting 10 percent duty increase but failed to apply the 10 per cent yearly depreciation value on imported used vehicles.

According to the report, Deputy President of NAGAFF, Nnadi Ugochukwu said it is wrong for the NCS to begin a new fiscal year with duty jackup, which he said normally begin at the start of the second quarter.

Explaining the scenario, Nnadi said, “Importers have to pay based on 2014 model even if the vehicle is a 2008 model. So, It is true the NCS has raised duty to 2014, normally their new calendar is supposed to start by March.

“This has made imported vehicles to become trapped at the port, Customs increased duty by 10 per cent, but refused to implement the 10 per cent annual depreciation.S

“So, if you look at it now, you have to pay 10 percent more. It refuses to implement the 10 per cent annual depreciation value on imported used vehicles; they are now making a 10 per cent increase every year.”

The union leader also expressed worry that the development may also lead to a drop in vehicle imports.

Corroborating above, the Chairman of the Port & Terminal Multipurpose Limited chapter of the Africa Association of Professional Freight Forwarders and Logistics of Nigeria (AAPFFLON), Geoffrey Nwosu, explained that even 2008 vehicles are being charged less the depreciation value.

“The Customs has hiked their duty to 2014 baseline starting this January. Even when we wanted to clear 2008 we were paying for 2013. The depreciation on it should be automatic”, he said.

Also speaking, Mr Timothy Adebowale, a clearing agent wondered why the service failed to build the depreciation value into 2014 models.

Meanwhile, the service had enjoined vehicle importers and their agents to give peace a chance and allow issues that have been conclusively addressed to run their cause.

According to Bomidi, nothing is new as the development is consequent on the prevailing federal government fiscal policy on vehicle age limit.

“Nothing has changed fundamentally from the age limit policy of the Federal Government. I don’t think it is necessary, these people know the rules.

“We don’t need to start this year like that, people are trying to see that things work out the way it should and if we are trying to see that things work out the way it should, we don’t need to be hitting ourselves over the head, we don’t need all those things.”

He explained that if some stakeholders are operating without any problem, there is no reason others who be having a different experience in view of the fact that they  operate under the same rules and guidelines.