Vehicle importers kick as Customs implements ECOWAS common tariffs

The Nigeria Customs Service (NCS) has commenced the implementation of the new version of the Economic Community of West African States (ECOWAS) Common External Tariff, (CET) 2022-2026 on imported vehicles.

According to the NCS, the migration from the old CET (2017-2021) to the new version, which is in line with the World Customs Organisation (WCO), takes immediate effect.

In a statement, yesterday, the Customs spokesman, Timi Bomodi, said the new rates apply to both new and used vehicles imported into the country. New and used vehicles are subjected to a National Automotive Council (NAC) levy of 20 and 15 per cent respectively.

The Service also confirmed the reduction of import duty on imported vehicles from 35 to 20 per cent.

The statement reads: “The nation has adopted all tariff lines with few adjustments in the extant CET. As allowed for in annex II of the 2022-2026 CET edition, and in line with the Finance Act and NAC, NCS has retained a duty rate of 20 per cent for used vehicles as was transmitted by ECOWAS with a NAC levy of 15 per cent.

“New vehicles will also pay a duty of 20 per cent with a NAC levy of 20 per cent as directed in Federal Ministry of Finance letter… It is instructive to note that domestic fiscal policy on the importation of motor vehicles and other items is targeted at growing the local economy in these sectors. The focus of NCS is on the implementation of these policies in the hope that they achieve their desired objectives in line with the National Automotive Policy and other fiscal policies of government.

“The NCS has also activated the use of Chapters 98 and 99 of the CET, following WCO recommendation for national use by contracting parties, which in our case promotes industrialisation through sectoral and sub-sectoral incentives for members targeted at economic growth, enhancement of security and minimised consumption of unwholesome goods.”

Customs noted that “bonafide assemblers, manufacturers of auto spare parts and other local manufacturers enhance technology transfer and skill acquisition, create jobs and increase per capita income”, hence the creation of the NAC levy.

“In Chapter 98 of the current CET – bonafide assemblers importing completely knocked down (CKD) and semi-knocked down (SKD) are to enjoy a concession of zero per cent and 10 per cent duty rate respectively. While within ECOWAS, duty rates for the same items are five per cent and 10 per cent respectively. Incentivising their efforts through policy interventions guarantees a win-win situation for the nation in the long run,” it stated.

Reacting, customs broker and ship agent, Prince Olayiwola Shittu, warned that poorly developed policies cannot have a positive impact on national growth.

“NCS’ job is to implement the Federal Government’s policies. When the government continues to take a wrong turn, the economy suffers. Policy somersaults result in negative economic performance.

“At a time like this, we expect our leaders to step in diligently. Meanwhile, they take combative steps rather than engage the right authority and present genuine concerns,” he said.

The former president of the National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Eugene Nweke, faulted the imposition of the NAC levy of 15. He argued that implementation of the latest version of CET amounts to official high-handedness and lack of consideration for the organised private sector.

NCS started the collection of NAC levy about two years. But the process was aborted following protests by industry stakeholders. Nweke said it is sad that NCS has turned itself into a policy-making institution, alleging that the money realised from NAC previously had not been accounted for.

Under the new regime, used vehicles will pay a total of 35 per cent, the same rate obtainable before the implementation of NAC levy. But new vehicles will pay five per cent higher than what they were paying previously.