‘Why accidented vehicles flood Nigerian ports’

A licensed Customs Broker and immediate acting National President of the Association of Nigerian Licensed Customs Agents (ANLCA), Dr. Kayode Farinto has blamed high cost of duty paid on new vehicles for importers preference for accidented vehicles.

Speaking with selected newsmen in his office recently, the Wealthy Honey Chief Executive Officer stated that if the duty for a new vehicle is $4,000, if it is accidented, Customs will give you rebate and ask the importer to go and pay $2,000.

According to Dr. Farinto: “If you look at the current situation at some port terminals, we see a high influx of ‘accidented’ vehicles. This is so because the government policy on revenue collection for Vehicles is too harsh.

“Let’s look at used vehicles. We are already collecting duty on used vehicles—what’s the need for the 15 per cent levy? I have said this at several forums that government must look at this. But you know, every government has its own policy. “The policy of Bola Tinubu is to make sure that we have new vehicles in place—whether electric or any of these newer models. Maybe that’s the position of the government. But if you are now bringing in new or non-accidented vehicles, the procedure and duties you’re going to pay will be too astronomical.

“That’s why people are bringing in the accidental ones and applying for ‘840’. The 840 process involves inspection by the Controller to verify the vehicle is truly accidented. If the duty on a normal vehicle is $4,000, because it’s accidental, they’ll give you rebate and say go and pay $2,000. So the owner goes and pays $2,000 and goes to repair the vehicle.

“It’s all because of government policy. If government will remove the 50 percent levy and will look at the other issues and other taxes on used vehicles, you will see that in Nigeria nobody wants to ride in an accidented vehicle.

“This is because it always has its disadvantages. Out of all the 100 percent accidents on the road, 35 percent is contributed as a result of accidented vehicles. This is because most of the accidented vehicles have actually had their chassis affected. When an accidental vehicle is moving on the road, the moment that vehicle is on the speed limit of 100, it starts vibrating and it can cause commotion, particularly these ones that are commercial. Before you know it, if there is any little impact, the accident will be catastrophic. Government should review that 50 percent levy.”

Speaking more on the 50 percent policy,  the former ANLCA acting President stated that: “Government should review that 50 percent levy. I feel that the 50 percent levy was done under Jonathan to discourage the importation of used vehicles and encourage new ones. But whoever is telling you that a used vehicle does not have value is wrong. That is why legal notices give room for what is called wear and tear. And by virtue of the wear and tear, by the year of manufacture, it starts progressing by 10 percent devaluation; that is wear and tear.”

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“So if it is not valuable, what do you mean it does not have value? If a new vehicle is $25,000 and you are bringing in the vehicle, it will just apply the legal notices. But if a vehicle is $5,000, then do the calculation. Does it still not have value? Do you know that the lowest target of any vehicle you bring in you are going to pay duty of 20 percent minimum duty? That is about N7million to N8 million.

“There are some technical issues that we should be very careful about. What we should be saying is that government, please bring down or cancel the levy on used vehicles. Let us reduce the rate of duty on used vehicles because fingers are not equal.

“Before now, Nigerian graduates could afford used vehicles; convert them to Bolt or Uber, and make a living. But now, it’s very difficult. That’s why government must listen in this area. This is the only area that we are pushing that the Government of Asiwaju Bola Ahmed Tinubu should listen to. We even learned that most of the banks are now going for Nigerian used vehicles. Even the House of Assembly is going for Nigerian used vehicles because new vehicles are very expensive.”