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Duties and levies on new and used vehicles and tyres imported into Nigeria to increase in 2014
| November 25, 2013
Duties and levies on imported new and used vehicles and tyres imported into Nigeria from next year will rise between 20 per cent to 70 per cent. The new import tariff on cars will rise to 70 per cent of the cost of the car - 35 per cent duty and another levy of 35 per cent of the cost of the vehicle. This compares to what the current tariff of 20 per cent duty and two per cent levy. Tyres of cars, buses and lorries will also attract 20 per cent duty and five per cent value added tax from next year These increases in tariff result from the recent approval, by the Federal Executive Council, of a new national automotive policy that is aimed at encouraging local production and assembly of vehicles in Nigeria. The policy imposes a high import tariff on the import of fully built vehicles. A document from the Minister of Finance, Dr. Ngozi Okonjo-Iweala, spelt out the new tariffs and gave guidelines for the implementation of the new policy. The document stated, "Local assembly plants shall import completely knocked down vehicles at zero per cent duty, and semi-knocked down vehicles at five per cent duty. “Local assembly plants shall import fully built unit cars at 35 per cent duty and 20 per cent for commercial vehicles without levy, respectively in numbers equal to twice their CKD/SKD kits. Imported tyres would also cost more as from next year as 20 per cent duty and five per cent value added tax have been placed on tyres of cars, buses and lorries. Local tyre manufacturing plants are to import tyres at five per cent duty in numbers equal to twice their production for two years from the date of commencement of production" "The Nigeria Customs Service shall use the value of a new vehicle depreciated by 10 per cent per annum, implying 10 years period of cars and by seven per cent per annum implying 15 year period for commercial vehicles. In either case, depreciation should never be below 30 per cent of the value of the new vehicle equivalent.”

(9) Comment


Comments

"The views and opinions expressed in these comment(s) or article(s) do not necessarily reflect the views or opinions of NGEX, its partners or its affiliates."
Yusuf    Hamburg, Germany    March 06, 2014
I can not understand Nigeria Govermment ....... on power, no good road , no work for his people on water, Govt. transport , and still increasing import duties other nation try to make live easy for is people but Nigeria one of oil nation what do you want for your people ???
sam    ilorin, nigeria    December 31, 2013
Unfortunately u guys has no government that listen to people.
ladi    Chicago, USA    December 29, 2013
This is a law that reeks with insincerity on the part of the government. I mean come on who are they trying to fool here, how many of this manufacturing/assembly plants will be in existence by January 4 2014, that can sufficiently absorb the thousands if not millions of people whose livelyhood is tied to importation of these products.

Agreed, it is a development that will aid local production of cars/tire and improve our cpacity to be self sufficient, but these are long term projects that require careful planning and putting the proper infracstructures and incentives in place, which currently is lacking. All this is all about special interest and a monopolist mentality to continuosly enslave the average Nigerian, whose government cannot provide a decent livelyhood for them and is ready to take away the decent one they have made for themselves. Just a bunch of shameless, spineless, greedy psychophants.

You shall all surely pay for your crimes to humanity on this earth and beyond.
Abubakar Bello    Kano, Nigeria    December 07, 2013
The new automobile policy for Nigeria whose major thrust is the increase of Duty and imposition of levy on imported Vehicles in order to encourage local assembly of Vehicles is bound to fail. This is because it is not based on sincere desire to encourage local assembly of motor vehicles.

If not, why give room to importation of fully built vehicles by the assembly plants at lower duty of 35% without levy as against the punitive rate of 35% duty and levy of 35% for other importers of especially used vehicles. The policy does not have a programme of how to revive the existing assembly plants in the Country who are either dead or have been sold to investors that are using them for purposes other than production of motor Vehicles - Fiat (Kano), Styre (Bauchi), Leyland(Ibadan), Anamco(Enugu) and Volkswagen(Lagos).

The bases for the policy and the speed with which it is being implemented without thorough ground work give room for suspicion that government is only creating a new set of super monopolist car importers. What the government failed to realize is that it can not stop the importation of especially used cars with our porous borders and highly corrupt custom officials. Sea ports of Nigeria\'s neighboring countries will soon witness huge surge in activities with corresponding increase in revenue from tariffs.

The local assembly plants will not be able to sell their vehicles whether imported or locally assembled as their prices will be prohibitive. They will put back their machines into the crates to take them to somewhere or back to their home countries as soon as they set up the plants.

The government should better think properly on this policy before it fails and should not allow itself to be stampeded into it by overzealous and selfish individuals who are not better than rippers but call themselves investors.
Fed-upNigerian    Lagos, Nigeria    November 28, 2013
@Nigeria's mediocrity new york, USA exactly !... and all the nonsense to encourage local car manufacturers, how many of these local cars have they - the govt and/or politician bought? ... they all ... as you say spend the money abroad buying bullet proof BMWs and Escalades! while they create hardship for the masses with stupid laws!

Lets take a poll to see what cars govt official use!!!

In the USA the federal govt buys all it cars for local manufacturers to support local business, after providing incentives and also so show that we are behind laws we pass, that is the first thing an educated and sensible govt does .... but what does the nigerian govt do? ... put tariff on bear necessities while they purchase necessities and non-necessities for the govt abroad.

very clever!! ... NOT!!
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