By Godwin Oritse
The Association of Nigerian Licensed Customs Agents, ANLCA, has described as vague the new duty on imported vehicles asking the Federal Government to clarify the target of the duty.
Speaking to Vanguard on the development, the Acting President of ANLCA, Mr. Kayode Farinto, said that Customs agents do not know if the two percent is an increase or a downward review.
Farinto also said that the circular on the new tax regime issued by the Federal Ministry of Finance, Budget and National Planning and addressed to all Ministries, Departments and Agencies (MDAs) on April 20, 2023, which comes into effect on June 1, 2023, did not also state if the tax was for new or used vehicles.
He explained that there is an existing five percent and 15 percent of Import Adjustment Tax on both new and used vehicles, adding that agents do not understand what the new two percent is for.
“The circular is very vague, we do not know if the circular is for new or old vehicles, the government needs to be explicit because there is an existing five percent and 15 percent of Import Adjustment Tax on new and old vehicles. “
Reacting to the development, Dr. Boniface Aniebonam, Founder, National Association of Government Approved Freight Forwarders, NAGAFF said that all the government does is introduce new taxes or increase existing ones without commensurate infrastructural development to show for the taxes collected.
He explained that his group had proposed an approach to the levies and taxes on the importation of used vehicles, adding that they should increase import duty on older vehicles and reduce the same for new ones.
He said: “That is the essence of the collection of levies and taxes for vehicle imports. I have already said that we should use an approach to it, the older a vehicle is, the higher the rate of import duty, the newer your vehicle is, the lower rate of duty. That way, the government will appropriate revenue.
“What most Nigerians are saying about the issue of tax is that if and when we pay these taxes, what do the government do with it, that is the question people are asking.”
Recall that the Federal Government had last week introduced a new set of taxes on imported vehicles, alcoholic beverages and single use plastics.
The new taxes contained under the new tax regime, stipulates that imported vehicles with 2000cc (2 litres) to 3999cc (3.9 litres) engine will pay an additional charge known as Import Adjustment Tax (IAT) levy of two per cent of the value of the vehicle, while vehicles with 4000cc (4 litres) and above engines will attract IAT of four per cent of their value.
The new levy is in addition to the 35% import duty and 35% levy being paid by importers of vehicles.
However, vehicles below 2000cc, mass transit buses, electric vehicles, and locally manufactured vehicles are exempted from the IAT levy.
The government has also revised the import prohibition list with the inclusion of used motor vehicles above 12 years from the year of manufacture.
Source: Vanguard
