It noted that the policy initiated by former President Goodluck Jonathan’s administration in 2013, not only failed to achieve the desired result, but also adversely impacted the cost of doing business.
It also impacted people’s welfare, government’s revenue and capacity to create jobs, adding, “The policy has also penalised compliant stakeholders in the sector with extant rules, taxes and tariffs applicable to the automobile industry.”
“The automotive policy should be immediately reviewed in the light of its copious shortcomings. Import tax [duty and levy] of 70% on new vehicles should be reduced to 35%. Import tax [duty and levy] of 35% on commercial vehicles should be reviewed downwards to 25%, while that of used cars should be reviewed from current 35% to 25%.”
The LCCI blamed the over 400 per cent increase in the price of vehicles in the last six years on failure of the auto policy, which was an import substitution industrialisation strategy to reduce importation of vehicles and incentivise domestic vehicles assembly.
A statement signed by its Director-General, Muda Yusuf, said import substitution strategy thrives in the context of high domestic value addition.
He was quoted, “It is within such a framework that the economy could benefit from the inherent values of import substitution, which includes backward integration, multiplier effects, conservation of foreign exchange, jobs creation and reduction of import bills.
“The review would be a relief to the private sector from the logistics perspective; more jobs will be restored in the automobile industry; smuggling will reduces and activities will snowball in the maritime sector.
“Car assembly plant will be better off with a five per cent duty on SKD; welfare effect on citizens will be positive; vehicle affordability by the middle class will improve; transportation sector will benefit and smuggling of vehicles will reduce drastically.
“The Nigerian Ports Authority (NPA), and ports’ terminal facilities will be more optimally utilised for better revenue performance; and customs revenue from vehicle imports will improve considerably.”
Yusuf also said the six-year-old auto policy is not sustainable in its current form, as it was not in consonance with the Nigeria Industrial Revolution Plan (NIRP), which was the main industrial policy document of the present administration.
“The NIRP espouses the strategy of resource-based industrialisation. Five years into the implementation of the auto policy, not much progress has been made, even though over 50 Vehicle Assembly plants licenses have been issued. Total annual sales of new cars in 2017 and 2018 were estimated at less than 10,000 units,” he added.
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