TO reduce the high rate of smuggling and shore up revenue, Nigeria Customs Service (NCS) has asked the Federal Government to reduce import duty on motor vehicles to 45 per cent.
New vehicles imported into the country currently attract of 35 per cent import duty and an additional 35 per cent levy.
Comptroller-General of Customs, Col Hameed Ali (Rtd) who disclosed this on Monday in Abuja during a media briefing to mark the 2019 international Customs day said that with the high rate of smuggling of vehicles into the country which is caused by the high tariff on imported vehicles, it had become imperative to reduce the tariff to stem the tide.
This, he noted, brings the total duty payable on such a vehicle to about 70 per cent.
He described the 70 per cent charge as high saying it was time to reduce it to 45 per cent.
While insisting that the 35 per cent import duty should remain, the additional 35 per cent charge could be lowed to 10 per cent.
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“We have 35 per cent duty and 35 per cent levy and so if you import a brand new vehicle into Nigeria, you pay 70 per cent duty.
“From what we have done and based on statistics, we discovered that this duty has now driven most of our importers to our neighbouring ports and also it has increased the rate of smuggling into this country of new vehicles.
“Having interacted with our stakeholders, we discovered from what they said that the sudden increase in duty is what is driving them.
“And since 35 per cent duty cannot be tinkered with, the one that can be tinkered with which is a policy by the Nigerian government, the 35 per cent was put in order to encourage our automotive industry to ensure that it is developed.
Alli said a reduction of levy If we reduce the levy would boost the volume of imported vehicles and the increase and the revenue from the Nigeria Customs Service.
“So we are advising that the government should review the levy and we are asking that it should be reduced to about ten per cent.
“If you do that, then it will mean that the collective duty on a new vehicle will be about 45 per cent. That is 35 per cent duty and ten per cent levy.
“With that, we will eventually get an increase in the volume of vehicles that are imported, smuggling will be reduced and therefore we will realise more revenue and the lives of our people will be saved.
The Customs boss enumerates some of the challenges facing the service to include porous borderlines, inadequate non-intrusive equipment, hostile border community dwellers, high level of non-formal trades, low implementation of ECOWAS Protocol on Transit and low level of compliance among international trade actors.
While the government was stepping up actions to equip the service, Alliance said there was a need for stakeholders to support the NCS towards a secure, seamless and transparent trade and travel across borders.
“The NCS will no longer great lightly any attempt to attack its officers on official duty.
“Consequently, parents, guardians and indeed traditional rulers of border communities are enjoined to advise and call their people to order as henceforth, we will not hesitate to use appropriate force to deal decisively with this disturbing trend.”