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Economic losses rise as clearing agents, NCS fail to reach truce

By Adaku Onyenucheya
02 March 2022   |   4:16 am
The Nigeria Customs Service (NCS) and clearing agents, yesterday, failed to find a lasting solution to the ongoing industrial action against anomalies in the Vehicle Identification Number (VIN) valuation system on imported vehicles, therefore, prolonging shutdown of the seaports.

•Operators decry over N500 billion loss as over 10, 000 vehicles trapped at seaports
•Warns e-hailing services threatened by rising cost of vehicles

The Nigeria Customs Service (NCS) and clearing agents, yesterday, failed to find a lasting solution to the ongoing industrial action against anomalies in the Vehicle Identification Number (VIN) valuation system on imported vehicles, therefore, prolonging shutdown of the seaports.

The agents and motor dealers after the meeting, which was held in Lagos, vowed to continue the industrial action despite the pleas by the NCS to give it some days to look into the issue.

Addressing the media after the meeting, Assistant Comptroller General of Customs, Zone A, Modupe Aremu, explained that the Customs is going to modify the complaints of the clearing agents to arrive at a conclusive arrangement for the VIN.

According to Aremu, “Due to all the complaints that the agents gave today, we are going back to the drawing board to modify all the issues that they raised. Hopefully, very soon we will get back to them on the outcome of the modification. VIN has come to stay, it cannot be suspended.”

But the stakeholders were not satisfied with the outcome of the meeting, as they vowed to continue the withdrawal of their services at the seaports until the NCS resolves the situation.

Former Assistant National Secretary, Association of Nigeria Licensed Customs Agents (ANLCA), Bolade Oladipo, said the meeting met half of stakeholders’ expectations, while they are hoping Customs will do something meaningful, otherwise, they will continue to shutdown the ports.

He said while Customs has given Friday to get back to the aggrieved licenced agents and other stakeholders, the strike action continues until there is a resolution.

He said with over 10, 000 vehicles trapped at the ports with no less than N10 billion lost, Customs should grant 90-days moratorium to have the backlog of vehicles cleared out of the ports to further decongest the ports as vessels that have berthed are yet to discharge their cargoes.

The Chairman, ANLCA, Tin Can Chapter, Ojo Akintoye, who brought documents of his transactions to the meeting, said he purchased a Toyota Corolla 2016 accidented vehicle for $5, 000 and shipped it with $1, 250, spending $6, 250 in totality.

He said by virtue of the law that guides the NCS, it recognises transaction value of the vehicle to be $6, 500 including the shipment, cost and insurance, but the NCS imputed a value of $13, 800 in the VIN value system.

“What the law says is that the $6, 500 should be changed to Naira and that will give my Cost Insurance and Freight (CIF) value and 35 per cent of the money in naira is what I am supposed to pay as value. But increasing it to $13, 800 is outrageous and does not conform to the law.

He said with the outcome of the truce meeting, the freight association would continue their withdrawal of service at the port until the VIN valuation system is adjusted.

Akintoye lamented that the abnormalities in the VIN valuation system is a ploy by Customs to generate the N3.1 trillion revenue target given to it by the Federal Government.

He said the Federal Government’s revenue target to the Customs was not in consideration of importers’ lack of access to funds, the challenges faced as well as the numbers and types of goods that would be imported into the country in a year.

The Spokesperson, Lagos State Motor Delayed Association, Lateef Animashaun lamented that the VIN valuation system in Nigeria is not synchronised according to global best practices, in which clearing declines over the years in other countries, while that of Nigeria increases outrageously.

He also lamented that apart from paying the high duties, Customs officials harass car dealers on their way to their auto showrooms and hijack their vehicles, despite having genuine clearing documents from the service.

He warned that while Toyota Corolla of 2003, 2005, 2007, presently being used for e-hailing services is being cleared for N500, 000, the business would soon fade away as people will find it difficult to get the car for business.

“There is a process in overaged vehicles, you pay a penalty of N25, 000 so long as the car is roadworthy and meets standard values plus the normal duty. With this high value, e-hailing business will be phased out because there will be no car to run the business.

“Lexus 570 2020 is cleared for N30 million. If you go to Cotonou, there is a standard which has been operating for years, seamless operations with appropriate values,” he stressed.

A Customs Licensed with National Association of Government Approved Freight Forwarders (NAGAFF), Prince Kennedy Onyeji, said the VIN valuation system has increased the value for vehicles by 400 per cent.

He said when a used vehicle of 2010 is inputted into the system, it comes up with a value of a brand new 2010 vehicle rather than used value.

Onyeji lamented that agents use $25, 000 to clear a 2010 vehicle bought for $7, 000, adding that most of the car dealers purchase these cars by auction.

He said the government knows they are losing a lot of money, adding that the genesis of this problem is government’s revenue targets every year, which is being passed on to the poor masses.