Customs’ appeal on tariff reduction
RECENTLY, the Nigeria Customs Service (NCS) urged the Federal Government to reduce the automotive levy on imported brand new vehicles from 35 per cent to 10 per cent. Comptroller General of Customs, Colonel Hameed Ali (retd), who gave the advice during a news conference to mark the International Customs Day (ICD) at the Federal Capital Territory (FCT), Abuja, noted that the Federal Government had put customs duty on brand new cars at 35 per cent and levy at 35 per cent, making importers to pay 70 per cent of the cost of a new car as levy and duty. This policy, he averred, had discouraged importers and caused them to divert their importations to neighbouring countries. According to the customs CG, by heightening smuggling, the policy had reduced the revenue that would otherwise have been accrued into the government’s purse.
While noting that the policy was put in place to encourage local automobile industries but that this seemed difficult to achieve, Ali said: “We are appealing to the government to review this policy and reduce the levy to 10 per cent so that we can now have 45 per cent on both levy and duty paid on brand new cars. Hopefully, when this is done, we will get increase in importation, revenue and it will also reduce smuggling.’’
It is indeed strange that in spite of the outcry by importers and concerned members of the public over the years, the Federal Government had not considered it necessary to reduce the tariff on imported vehicles. Over the years, smugglers have had a field day bringing vehicles into the country through illegal routes, engaging customs personnel in bloody skirmishes and causing the communities along the borders palpable distress. One corollary of the current state of affairs is that customs personnel have turned the country’s highways into checkpoints in the bid to arrest the owners of smuggled vehicles. Apart from the economic implications of the loss of man-hours at the checkpoints, the stationing of customs personnel on the highways apparently circumscribes the ability of the agency to combat smuggling at the borders.
It is clear that the government has been lacklustre in policy making. For instance, the proposal by the Customs boss is an issue that should have been taken up at the Federal Executive Council (FEC) meetings and discussed comprehensively before now. Those discussions would then have formed the basis for policy decisions built into the 2019 budget. Apparently, the current scenario of untamed smuggling across the borders will continue for now, together with the negative corollaries for the country. Interestingly, the customs boss admitted that in spite of the success recorded in the last three and half years, the service had been facing challenge of porous border lines and inadequate non-intrusive equipment, hostile border community dwellers, high level of non-formal trades and low implementation of the ECOWAS protocol on transit. These challenges, in our view, would have been effectively addressed if the government had changed its reactionary approach to border/import issues. Time and again, drawing from global practice, we have suggested the construction of border walls to tame the menace of smuggling, but the authorities have refused to budge.
Besides, the country can ill afford the allegations of extrajudicial killings by customs personnel at the communities along the border routes. For instance, traditional rulers in Yewa, Ogun State, recently accused officers and men of the service of perpetrating extrajudicial killings in their domains, warning that anarchy loomed if the issue was not addressed fortwith. Apparently, there is no love lost between the NCS and the people of the affected communities, and a proactive leadership would have caused the issues in contention to be ironed out at the discussion table instead of pursuing the ruinous path of mutually assured destruction. If the NCS continues to see the people of those communities as inherently hostile to its activities and not worthy of consultations, it will continue to be hampered by their lack of cooperation. On the other hand, it is incumbent on the communities to demonstrate their commitment to the government’s anti-smuggling efforts and not give the impression that they are protective of smugglers and economic saboteurs.
To say the least, we endorse the call for reduction of automotive levy on imported brand new vehicles. Bringing in vehicles through the country’s seaports does not have to continue being an economically and psychologically harrowing experience. This is why the government must consult widely with relevant stakeholders and emplace a new policy that would be beneficial across board. While such a policy would not necessarily end smuggling of vehicles into the country, it has the potentiality to reduce it to the barest minimum, minimise the loss of lives at the border communities and lead to higher revenues from vehicle importation.