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Custom duty payment: Options for end users of imported vehicles

By Joseph Onyekwere and Godwin Dunia   |   12 March 2017   |   4:13 am

Imported Vehicles

Policy Cannot Operate Retroactively

The Comptroller General of Customs, Col. Hameed Ibrahim Ali (rtd), recently issued a circular to the effect that all motorists in Nigeria should go and pay custom duties if they have not done so before April 12.

The circular, issued on March 7, said it gave a month period of grace starting from March 13. The Customs also advised all private car users, as well as, car dealers who are not sure of the status of their import duties to approach four zonal centres across the country for verification, warning that defaulter’s vehicles would be impounded and owners prosecuted at the end of the deadline.

Although members of the National Assembly have kicked against the new policy, directing Ali to halt it, there is no indication the Customs boss has decided otherwise.


Consequently, The Guardian decided to interrogate the policy with outstanding maritime lawyers based on perceived chaos and inconvenience such exercise would impact on the innocent end users of imported vehicles.

For instance, buyers are made to pay full for vehicles, including duties, and are issued with customs papers that may be fake at the time of purchase.

Therefore, between owners of vehicle and dealers, who bear responsibility for customs’ papers? If a vehicle is found not to have appropriate duty papers, and the dealer is still available and is found to have issued fake customs papers, who is to be liable for payment of customs duty?

Reacting to this, a Maritime lawyer and Senior Advocate of Nigeria, Chidi Ilogu, said it could be either the buyer or the dealer, depending on the way the vehicle was purchased.

“If the end user imported it directly, he would be liable. If he did not import it directly, but bought it from a local dealer, it is the dealer that would be liable,” he said.

According to him, the brunt of the problem would be borne by the end user who would regularly be accosted by Customs officials, if it happens that evidence of duty payment is not genuine.

“The problem is that before it gets to the dealer, it would have inconvenienced the end user, because it is the end user that the Customs officers would first meet, and that problem is capable of compounding matters and creating serious inconvenience to the public,” Ilogu warned.

He noted that Customs at all times most recognise that their agency is porous and so many wrong actions have been brought about by some Customs officers who are not sincere, thereby inconveniencing the general public, while at the same time compromising the integrity expected of them in the exercise of their duties.

He said: “The corruption in the system is very high. At all levels, Customs officers are involved in a lot of corrupt activities and underhand dealings. So, it would be unfair to penalise innocent end users who may not have knowledge of what may have happened. The officers might have connived with dealers to issue fake custom duties. How would the end user know which is fake? How would he know what is the proper custom duties to pay? Implementing the policy would seriously compound the woes of innocent users.”


He declared that the decision by the Comptroller General is ill-conceived and fraught with a lot of practical problems and inconvenience to the end users.

Another Maritime lawyer, Osuala Emma Nwagbara said under the Custom and Excise Act, the importer is under obligation to pay import duties upon importation of any vehicle into the country, as allowed under the excise policy.

It is the importer, he said, that should be held liable where duty is not paid. He stated further that the policy that seems to target the buyer should be looked at again because at the time the buyer went to open market to buy under what is known as ‘Market Overt’ system, the buyer is not expected to find out whether import duty was paid or not on the item he wishes to purchase before he pays the price.

According to him, in the event that an imported vehicle is impounded for non-payment of duty, the person that is liable is the importer of the vehicle.

Sharing similar view, Chief Gbemi Akinola said it is the person that brings the car that pays the custom duties. “It is the importer. Of course, he passes the bill to the buyer, but he is the one that brings in the car. He is the one that interfaces with the Customs at that time. Unless the end user imported it by himself, he will not be liable. If it is the dealer who imported the cars, he will pay. By the time he is selling, part of your documentation is evidence of payment of customs dues. He adds it to the papers that he is handing over to you,” he stated, adding that the best a buyer can do is to go to any Customs office to verify whether what is being given is genuine or not before making final payment.

The essence, he noted is to save buyer from any harassment by Customs officials or security agents. He however, warned that implementing the policy would inconvenience the public. “Custom is set up to stop such infractions, but they allow it and when people are going on the road, they now start stop and search operations. That is not Customs job. Their job is to make sure that any car that comes in, at the point of entry, government collects its dues. So, if it escapes, whether through the connivance of Custom officials or through whatever, it is really not your headache.

“So Customs should go and do their home work well. It is like Custom officials chasing people with foreign rice on Abeokuta road. How did they cross the border? Are they not meant to stop them at the border? If they have done their work, they should not even have brought it into the country,” he insisted, adding that anybody whose car is impounded on account of the policy can challenge it in court, because the policy can not operate retroactively.”

According to him, it should not affect those who had already bought their vehicles long ago and are using it. “If in any case such policy should stand, it should only affect those who imported after the policy has come into force,” he declared.

Anthony Nwaochei shares the same thought. He is of the view that the person who brought in the cars would be liable. “Duties are payable at the point of importation, at the point when the car hits the port or border,” he stated, adding that that would not however exonerate somebody who did not do due diligence at the time of purchase.


But Abiodun Owonikoko (SAN) is of the opinion that payment of custom duty on vehicle has to do with the person who owns the vehicle at the material time that it was realised that the custom duty were not adequately or even paid for.

He said: “If a person bought a car from a dealer, showroom or anywhere, what the law requires is that such person must request or get adequate papers that will indicate that the vehicle he bought is not only genuine, but that it is not a stolen one.

“The point in the matter is that, there is no way the buyer could be exonerated from been liable in law, because he is the owner of the vehicle and he is expected to have collected every documents pertaining to the vehicle at the point of purchase from the dealer or a third party”.

Owonikoko also stated that if it is realised that custom duty is not paid on a particular vehicle, the question is how are you sure that the owner is not aware of such fact?

He therefore concluded that if a vehicle is found not to have appropriate duty papers or been issued with fake papers, there is no way buyer or owner will not be liable.

In the same vein, another senior advocate, Dr. Babatunde Ajibade, placed the responsibility on the user since he is the one accessible with the vehicle.

“Ordinarily, it should be the duty of the dealer, but for the fact that you are the one using the vehicle and if the Customs see the vehicle on the road it is the owner they will hold and not the dealer. So, the dealer cannot be held responsible, rather it is the buyer if he fails to produced evidence of genuine custom duty,” he declared.

Ajibade also pointed out that it would be difficult for the buyer to transfer liability to the dealer if he cannot produced the custom duty paper on request.

“If the buyer or user in this instance, is requested to show custom duty papers of the vehicle and it is realised that he cannot produce them, then it is impossible to refer them to the dealers’ shop at that moment. It is the owner or user that will be held responsible.




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