Stakeholders foresee massive cargo diversion over 75% import levy on used cars

The newly introduced 75 percent import levy on used vehicles by the Federal Government would result to heavy diversion of imported vehicles to ports of neighbouring countries, according to maritime industry stakeholders, who took turn to appraise the new fiscal policy. The policy, they say, will not only lead to the diversion of vehicles to ports that are user-friendly, but will also result to loss of government revenue as was the case with 110 percent levy and duty on rice. Yenukume Nohoesu, managing director, Braveview Investment Limited, who faulted the policy, noted that it was not importation-friendly as government did not consider the business of the importers before coming up with such decision. He explained that the new increase in duty to 75 percent would likely lead to increase in the market price of cars, especially used cars, thus making the end users to suffer. Citing an example with a vehicle that cost N600,000 before now, he said the 75 percent levy would hike the price of such a car to about N1.1 million, which would ultimately result to drop in demand. “Manufacturing vehicles in Nigeria is not going to be an easy business given the present predicament of shortage in infrastructure and power supply. Nigeria does not have viable assembly plant in the country. Therefore, increasing import duty will only end up making Nigerians poorer. Government should have allowed manufacturers to begin production of vehicles before increasing duty on the imported once,” he explained. An industry close watcher, who also believed that the increase in duty would lead to diversion of cargoes to Cotonou as well as smuggling and loss of job, also told BusinessDay that the members of the Association of Nigeria Licensed Customs Agents (ANLCA), Tin-can Island chapter, were strategising on how to engage the government on the proposed duty hike. The source further added that some stakeholders, including ANLCA, would be meeting with the government in Abuja this week to make their views known to the government. Samuel Elem, secretary of Association of Freight-Forwarders (ASSOFF), Apapa chapter, who noted that most Nigerians could not even afford the fairly-used vehicles coming in from Europe, also said that market price of cars would likely go up unless there was a plant that could manufacture cars at a cheaper rate.