FG puts duty on imported cars at 70%, 35% on buses

Determined to encourage increased local production of vehicles and to revive the nation’s dormant auto industry, the Federal Government has increased the import duty on used and new vehicles from current 20 percent to 70 percent.

A recent memo by Ngozi Okonjo-Iweala, minister of finance/coordinating minister for the economy, and sent to Abdullahi Dikko Inde, comptroller-general, Nigeria Customs Service (NCS), directed that imported fully-built unit (FBU) of cars shall now attract 35 percent duty and 35 percent levy, totalling 70 percent charges for both new and fairly-used vehicles. This is in line with the Federal Government’s new automotive policy announced recently by Olusegun Aganga, the minister of industry, trade and investment.

The memo also stated that the duty on buses has also been raised from 10 percent to 35 percent without levy.

The minister’s directive, dated November 14, 2013 and also sent to Federal Inland Revenue Service (FIRS), destination inspection service providers namely Cotecna Destination Inspection Limited, Global Scan System and SGS Nigeria Limited, stated that approval for the introduction of the new fiscal measures was granted by President Goodluck Jonathan.

On the other hand, as part of the policy, local auto manufacturers, like Innoson Vehicle Manufacturing Limited, Nnewi; VON Automobile (formerly Volkswagen), Ojo; National Trucks Manufacturers, Kano; PAN Nigeria, Kaduna, and others, will no longer pay duties or levies on their Completely Knocked Down (CKD) sets imported from their overseas partners, while Semi-Knocked Down (SKD) components for the local production of vehicles will attract only 5 percent duty without levy.

“The above measures are to create an environment to support existing assembly plants and attract other Original Equipment Manufacturers who have expressed interest in Nigeria,” the minister said.