From January 2014 duties and levies payable on imported new and used vehicles as well as imported new tyres from next year will increase from the present 20 per cent to 70 per cent, the Federal Government has announced. Overall, this could translate into a 60 per in the current price of imported vehicles.
A two-page document dated November 14, 2013 and signed by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, gave the new import tariff on cars as 70 per cent (of the cost of each vehicle).
The document, with reference number BD/FP/DO/09/189, also stated that fully built commercial vehicles would attract 35 per cent duty but no levy imposed.
Specifically, it 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,” it stated.
The document also stated that a fully built car would attract a duty of 35 per cent and a levy of another 35 per cent of the cost of the vehicle.
Before now, importers/dealers paid 20 per cent and two per cent as duty and levy, respectively on new cars. Ten per cent flat rate was also imposed on commercial vehicles.
Similar high tariff will also be charged on used vehicles, according to the document. It added that 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.”