Customs switch NAC15%b with CET15% amid port users protest
BY EGUONO ODJEGBA
The Nigeria Customs Service(NCS) reportedly perturbed over rising protests by clearing agents, importers, vehicle dealers amongst others against the introduction of the vexatious 15% National Automotive Council(NAC) may have counter planted same with yet another controversial tariff nomenclature, the Common External Tariff, CET, 15% Levy.
Informed industry sources hinted that the alleged illegal swapping of the NAC 15% with CET 15% is real as the change has been reflected in the customs system. The customs action is believed to have been taken to stave off the buildup of threats by customs clearing agents and freight forwarders to again shut port activities, barely 60 days a similar protest paralyzed activities at the nation’s sea ports.
Efforts to get the NCS to clarify the development failed as the Customs Spokesman, Deputy Comptroller Timi Bomodi declined to speak on the matter when contacted, saying he is presently not in the office.
In a reply to our reporter’s text message, Bomodi said, “l have been away in the past two weeks. I’ll get to you on resumption please.”
It will be recalled that on April 8th 2022, Customs believed to be acting on a directive of the Federal Ministry of Finance, introduced the NAC 15% Levy on all imported vehicles, which was roundly faulted by port users as insensitive, unconstitutional and illegal.
It was amid this controversy that the NCS in a roundabout approach, apparently in attempt to force the extra tariff, altered the nomenclature previously conceived as NAC levy, which the service has attempted to re-smuggle in as CET levy.
Industry stakeholders who have reacted to the introduction of the controversial tariffs include the National President of the National Council of Managing Directors of Nigeria Licensed Customs Agents (NCMDNLCA), Mr. Lucky Amiwero, Prince Segun Oduntan and Alhaji Rilwan Amuni.
In a petition to the presidency in respect of the introduced NAC 15% Levy, Amiwero said the introduction and enforcement of NAC Levy is in contravention of the Finance Act 2020.
The letter dated 23rd April 2022 and addressed to President Muhammadu Buhari, Amiwero faulted the position of the NCS and argued that the Finance Act provides for 5% levy for Motor vehicles as against the 15% levy currently been pushed; in defiance of the 2020 and 2021 Finance Act passed by the National assembly, and duly signed into law.
“The Finance Act provides for 5% levy for Motor vehicles of Chapter 8703 that is cars, there is no provision for NAC levy of 15% in either, 2020 and 2021 Finance Act passed by the National assembly and signed in to law”, he said.
The letter reads in part, “We wish to bring to the attention of the Federal Government the duty and levy on Motor vehicles approved in the Finance Act of 2020, which contravenes the National Automotive Council (NAC) levy of 15% assessed on Motor Vehicles by Nigeria Customs Service.
“Amendment of the first Schedule to the Act is amended by inserting and replacing as the case may be the following duties and levies: (a) Duty on Tractors (Heading 8701) From 35% to 5%. (b) Duty on Motor Vehicles for the Transportation of more than ten persons (HS Heading 8702) from 35% to 10%. (c) Levy on motor Vehicles for transportation of persons (Cars) (HS Headings 8703) from 35% to 5%, and (d) Duty for Motor vehicles for transportation of Goods (HS Heading 8704) from 35% to 10%.”
Also speaking on the matter, Compliance Taskforce Chairman of the Association of Nigerian Licensed Customs Agents (ANLCA) Tin Can Island Port, Alhaji Rilwan Amuni accused the customs service of desperation to generate more revenue, irrespective of alleged serious harm it is doing to the economy and Nigerian consumers.
“When the customs found that we are shouting over the 15% NAC, they ran to change the nomenclature to CET Levy. We called some of our colleagues operating under ECOWAS, they told us there is nothing like CET Levy in their own column.”
Amuni explained that putting all costs into consideration, vehicle import levy is now 35%, and lamented that it amounts to double taxation and detract significantly from the ECOWAS CET to which Nigeria is signatory.
“If you compute the cost insurance and freight, the duty and the NAC, VAT, ETLS and 7% surcharge, you would find out that we are paying more now compared to when we pay 35% duty, it amounts to double taxation.
“The desperation is that, the 30% they were forced to reduce through the ECOWAS CET, they are trying to bring it in through the back door. Levy is supposed to be on luxury items like a yacht, new vehicles, ships and so on; but you’re placing 15% on a 20-years old vehicle? What pleasure are we deriving from that?”
Also commenting, ANLCA chieftain and immediate past chapter chairman of Tin Can Island Port, Prince Segun Oduntan accused the federal government of unfair high handedness in always singling out the port economy in its desperate urge to make more money.
He slammed the Customs for an alleged illegal collection of 35% levy on vehicles between 2009 and 2022 until the CET policy obliged the service to discontinue the collection. He lamented that the introduction of NAC 15% is seriously affecting port business, and wonder if the NCS plan to refund the unapproved 35% levy it collected in the past one decade, in reaction to Customs claim that every customs administration have the right to adjust its tariff system.
“This NAC 15% problem has affected port business a lot, because people that travelled during that period for importation are just finding their way back, demurrages have accrued, the Nigerian working populace in the maritime sector, their work loads are being reduced, people are getting thrown back into the labour market.
“We are not asking customs not to do technological advancement, but they have to do it in sequence and carry everybody along in the process. The Act that recommends NAC 2% says that it should be paid on new vehicles and new spare parts.
“So, now that ECOWAS has reduced duty on vehicles to 20% from 35%, is the Nigeria Customs Service going to return to us the 15% difference they have been collecting from us for several years? What law is backing NAC 15% Levy?”
He continued: “Why does the government want to set such a tariff when they know the hardship we are going through in Nigeria? Why must it always be this sector? The only languages the customs understand is revenue, there is terrible eye service going on in the service today.”