Because the introduction of Automobiles Identification Quantity system for the valuation of imported automobiles, the platform has been riddled with controversies which have made automobiles nearly inaccessible to peculiar Nigerians. On this piece, ANOZIE EGOLE examines how the platform has raised responsibility on imported automobiles by over 100 per cent, amongst different challenges
It’s not information that in a bid to make sure uniformity of duties on imported used automobiles of the identical 12 months, firm and mannequin, the Nigerian Customs Service, in February 2022, launched the Automobile Identification Quantity for the valuation of imported automobiles.
Neither is it information that when the digital platform was newly launched, it was riddled with so many controversies as freight forwarders and clearing brokers working on the nation’s maritime sector kicked towards it, saying it was marred by hitches and inconsistencies.
What makes the information is that the platform has led to an over 100 per cent enhance in duties paid on imported used automobiles, particularly these whose fashions are beneath 2013. That is coupled with the weakened naira worth towards {dollars}, which has additional pushed up the costs of automobiles.
On the launch of VIN for digital valuation of imported automobiles in February, plenty of stakeholders voiced their displeasure concerning the Customs’ objectivity whereas stating that the values used didn’t precisely consider annual depreciation as required for used automobiles.
Will probably be secure to say that the present change charge regime could also be fuelling the low importation of automobiles skilled at the moment. It has made automobiles, that are alleged to be requirements to houses, luxuries.
The Appearing Nationwide President of the Affiliation of Nigerian Licensed Customs Brokers, Kayode Farinto, in an occasion lately, expressed displeasure over the hitches encountered with the VIN at the same time as he raised issues that some automobiles have been but to be captured on the VIN platform.
He stated that the platform was selective in nature, working effectively with commonplace chassis automobiles whereas not performing optimally with non-standard chassis automobiles.
“When the Customs’ VIN was being conceptualised, I used to be a type of that requested that now we have a pilot scheme. However my recommendation was not heeded by the Customs, which went forward to start full implementation. Now, there are some classes of automobiles that haven’t been captured below the VIN Valuation coverage.
“There are some classes of automobiles that haven’t been factored in below the Customs VIN Valuation coverage. Some Mercedes Benz, some ML, some X-Class haven’t been factored within the VIN valuation coverage,” he famous.
Challenges
When the Federal Authorities raised the age restrict of automobiles from 10 years to fifteen years in 2010, the intention was to curb dumping of overaged and outdated automobiles into the nation and encourage the usage of newer automobiles.
Sadly, the coverage didn’t go far as greater than 60 per cent of Nigerians, particularly youths, nonetheless discover it inconceivable to amass newer automobiles.
From all indications, it appears the federal government is attempting to actualise the coverage on new automobiles by means of the introduction of VIN. Some freight forwarders opine that the introduction of VIN for automobile clearance is an oblique method of phasing out older automobiles because the age restrict of automobiles on the platform is 9 years (2013).
The Ports & Terminal Chapter Chairman of the Nationwide Affiliation of Authorities Authorised Freight Forwarders, George Okafor, informed our correspondent in a chat over the weekend that automobiles beneath the 2013 mannequin have been billed to pay 2013 duties.
“The challenges are that automobiles from the 2012 mannequin and downwards are nonetheless paying the responsibility of the 2013 mannequin. Those which are cheaper now’s even the responsibility we pay on the 2013 mannequin. In the event you usher in a automobile whose 12 months is decrease than 2013, you can be requested to pay for 2013. Automobiles decrease than 2013 pays the responsibility for a 2013 mannequin, which makes the cost greater. It’s like the federal government desires to part out previous automobiles, they wish to discourage folks from bringing in older automobiles.”
Talking additional, Okafor stated the problem was principally with Mercedes Benz and BMW automobiles, including that he was requested to pay over N3m for a automobile whose responsibility was alleged to be N650, 000.
“The scenario is affecting the clearance of automobiles. Many individuals are abandoning their automobiles, primarily Mercedes Benz and BMW, as a result of their duties are very excessive. I’ve this 2003 Mercedes M-Class we paid nearly N3m to clear. The worth I obtained earlier than the arrival of the automobiles was round N650, 000 as an previous automobile. We spent nearly over N3m to convey it out of the Customs and the port. The folks that contributed cash to clear the automobile are saying that they are going to promote the automobile to get their cash, despite the fact that they might not be capable of recuperate their cash absolutely. I had already collected the responsibility for N650, 000 earlier than the arrival of the automobile however the automobile didn’t enter Nigeria earlier than the introduction of the VIN. So, when the automobile arrived and the VIN valuation commenced, they stated it was N3m. So, you may think about from N650,000 to over N3m.”
He famous that the scenario had pressured lots of people into abandoning their automobiles on the ports, saying that it was the federal government’s personal method of eliminating older automobiles.
On his half, Farinto urged the federal government to evaluation the coverage, stressing that almost all of those automobiles beneath 2011 have been used for e-hailing enterprise by younger Nigerians.
“What I feel the federal government ought to do is to evaluation the coverage. Be it as it could, it’s the coverage of the Federal Authorities and also you don’t count on the Customs to legitimise illegality. You’ll be able to’t see 2009 automobile within the system; the least you may see is 2013.”
Based on him, the tough financial system is likely one of the the reason why older automobiles are flooding the nation.
“So, we at the moment are telling them that the coverage is 12-year-old. They need to bend backwards to 2011 and I feel they’re engaged on that. So, in the event you reach bringing in something lower than that, try to be able to pay the responsibility of 2013 for a automobile that’s lower than the 2013 mannequin. The coverage is that personal automobiles coming into the nation can’t be older than 12 years whereas business automobiles will be as much as 15 years.”
He additional stated, “It’s the harsh financial system that has brought about older automobiles to litter the nation. I’m additionally of the opinion that the federal government can evaluation that coverage in order that it may possibly fulfill the curiosity of the youth, the newly employed and people which are going into commercialisation. This may, no less than, make them self-employed. Even in the event you take a look at the 2011 mannequin, how many individuals can afford it? My automobile is 2010 and it’s over N7.5m. So, that’s the reason the federal government ought to take a look at it and evaluation that coverage.”
A automobile supplier on the well-liked Berger vehicle mart, who gave his identify as Chinonso Stainless, stated that the scenario had taken a destructive toll on their companies, noting that gross sales had dropped.
“I need to inform you the reality, our gross sales have dropped. Those we’re promoting for now are primarily those who got here in earlier than the introduction of VIN. However for automobiles that newly arrived in Nigeria, their costs are nonetheless very excessive, particularly for older automobiles beneath 2010, as a result of that’s what we principally use right here and that’s additionally what we promote sooner. So, it has probably not been simple.”
Conclusion
Farinto lauded the administration of the NCS for permitting non-chassis automobiles to be cleared from the ports.
“I wish to commend the Customs for permitting these non-chassis automobiles to be cleared as a result of the Federal Authorities coverage on automobiles to come back into the nation begins from 2011 or thereabout. If the Customs desires to implement the Federal Authorities’s coverage, then automobiles that are available earlier than 2011 will both be confiscated or seized.”
In his response, the Nationwide Public Relations Officer of the Nigeria Customs Service, Timi Bomodi, warned the brokers that in the event that they continued of their present behaviour, it may get to some extent the place they’d begin dropping their automobiles.
“In the event that they preserve pursuing that, it’ll get to some extent the place they are going to be dropping their automobiles. We’re looking for a tender touchdown for them. The extra folks throw mild on that factor, the more serious the punishment will probably be. They need to simply bear the strokes. The regulation has stated that that is the restrict. If we apply the regulation to the latter, they received’t have something to say.”
He stated, “What they’re complaining about is a case of a person that dedicated against the law and was sentenced to dying however the person who was alleged to execute him checked out him and stated, ‘I provides you with 25 strokes of the cane.’ Thereafter, he collected 25 strokes of the cane, checked out the person who was alleged to kill him and stated, ‘Take it simple, do you wish to kill me?’ That’s the story. folks don’t perceive the gravity of the issues they do. We try to assist them, however as a substitute of them protecting quiet and bearing the strokes of the cane, they’re complaining,” he concluded.
