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Customs withdraws NAC, retains 15% add-on levy on imported vehicles

By Adaku Onyenucheya
02 May 2022   |   4:09 am
Apparently bowing to pressure, the Nigerian Customs Service (NCS) yesterday withdrew the controversial National Automotive Council (NAC) levy on imported used vehicles, though retained its 15 per cent add-on tariff.

New tariff is illegal, agents pushback
Apparently bowing to pressure, the Nigerian Customs Service (NCS) yesterday withdrew the controversial National Automotive Council (NAC) levy on imported used vehicles, though retained its 15 per cent add-on tariff.

However, the replacement of ‘NAC’ with ‘levy’ has triggered a fresh uproar among clearing agents.

Documents made available to The Guardian showed that the ‘NAC’ title has been replaced with ‘Levy’ but with same controversial charges.

Recall that importers, clearing agents and car dealers had kicked against introduction of NAC levy on imported vehicles, in and threatened to embark on industrial action.

The NCS had, two weeks ago, reviewed duty on imported used cars from 35 per cent to 20 per cent, but went further to add another 15 per cent NAC levy, which enabled the agency to regain the 15 per cent from the former import duty on vehicles.

Vehicle importers still have to pay 20 per cent import duty plus 15 per cent NAC levy, amounting to 35 per cent.

Spokesperson of NCS, Timi Bomodi, had said the new tariff was in line with adjustments stipulated in the Common External Tariff (CET) of the Economic Community of West African States (ECOWAS) protocol, of which Nigeria is a signatory.

But after much pressure from stakeholders, NCS, in its portal, removed ‘NAC’ and replaced it with ‘levy’, which is against the Finance Act that stipulated that levy should be five or 10 per cent for some vehicles.

The amended first schedule of Finance Act 2020, provided a reduction in duties and levies on imported vehicles as contained in part VI of the act under Customs And Excise Tariff (Consolidation), section 38, sub-sections A to D.

The act stipulated that duty on tractors (HS Heading 8701) be reduced from 35 to five per cent, duty on motor vehicles for transportation of more than 10 persons (HS Heading 8702) and transportation of goods (HS Heading 8704) be reduced from 35 to 10 per cent.

The act also provided a reduction of levy on motor vehicles for transportation of persons (cars) with (HS Headings 8703) from 35 per cent to five per cent.

The National Publicity Secretary of Association of Registered Freight Forwarders of Nigeria (ARFFN), Taiwo Fatomilola, decried the new development, saying it is illegal and against policies on tariffs.

“We woke up with news of NAC being removed and replaced with a levy this morning. They just switched over because NCS knows that NAC levy of 15 per cent, under the law, is supposed to be only two per cent for new vehicles, it is not applicable to used vehicles and used spare parts. The 15 per is illegal,” he said.

He alleged that the new levy of 15 per cent is part of Customs strategy to meet revenue targets by the Federal Government, adding that Customs is trying to strangulate Nigerians despite the harsh economic situation in the country.

He said the different duties and levies introduced by the Customs are ploys to promote smuggling with the recent reopening of the border, stressing that “this will push genuine importers out of business.”

The President, National Council of Managing Director of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, argued that the levy is pegged at five per cent according to the Finance Act of 2020 and 2021, and not 15 per cent as newly introduced by the Customs.

“What we have for levy according to the Finance Act is five per cent. Customs should tell us where they got the 15 per cent levy from, under what law? This 15 per cent, levy is illegal. There is nowhere the government has come out with 15 per cent levy on imported used cars. Is it a new policy or what? This is a ploy to defraud Nigerians,” he alleged.