Customs agents caution against effect of 15% levy on used vehicles

Association of Nigeria Licensed Customs Agents (ANLCA) has warned that the effect of the 15 per cent National Automotive Council (NAC) policy on imported used vehicles will begin to manifest in the next quarter of 2022.

Acting President of ANLCA, Kayode Farinto, maintained that the cost of clearing used vehicles has increased in an unprecedented manner and might produce negative consequences.

Speaking during the association’s National Executive Council’s (NEC) meeting in Lagos, Farinto said although tariff provisions in the Economic Community of West African States (ECOWAS) empower member nations to introduce Import Adjustment Tax (IAT), it should be fair, especially for locally made commodities and products.

“The tax is meant to protect local manufacturers. The question yet to be answered is whether the Federal Government is manufacturing used vehicles locally? “Act No.6 of 2014 is very clear on the introduction of NAC levy on fully built imported new vehicles.

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We woke up to see that the Federal Government had migrated to ECOWAS Tariff, which states that for raw materials the rate of duty should be five per cent, semi-finished products 10 per cent, while used vehicles should attract 20 per cent.

“And government realised that it must introduce additional charges on imported used vehicles, now slammed 15 per cent on all used vehicles and tagged it NAC levy. When the government saw that it was obvious that it could not defend its action, it changed the levy to 15 per cent.

“The spiral effect of the levy is unprecedented, as clearing of used vehicles has skyrocketed and its spiral effect will begin to manifest in the next quarter of 2022,” he said. Farinto maintained that several efforts have been made to resolve the problems, among which are paying visit to the National Assembly and the Federal Ministry of Finance to make the executive arm of government act reasonably on the need to ameliorate the sufferings of Nigerians by reducing the levy to five per cent, if it will not be completely scrapped.

He said the Council for the Regulations of Freight Forwarding (CRFFN) has directed the Registrar to engage the Federal Ministry of Finance on the issue as a matter of urgency to ensure the suspension of the NAC levy.

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