FG Loses 50% Vehicle Import Duty, Levies To Smugglers – Report
The federal government is losing billions of naira in duties payable on imported vehicles as 50 per cent of such vehicles in Nigeria reportedly come in illegally through closed borders, it has been revealed.
An investigative report conducted by the Nigeria Auto Journalists Association (NAJA) also revealed that many vehicles come in through the seaports without the right duties paid.
The Economic Confidential reports that President Muhammadu Buhari’s administration in 2016 shut the land borders against vehicle importation.
The directive is allegedly flouted by influential people/dealers who bribe their way to clear their vehicles without due process.
The development, according to analysts, amounts to “economic sabotage.”
The underhand dealings are said to be prevalent in major land borders across the country including: Kpobe, Idi Iroko and Ijowu (Ogun State), Seme (Lagos State), Shaki (Oyo State), Daura (Katsina State) and Baga (Borno State), among others.
It could be recalled that the Nigeria Customs Service (NCS) had in September 2019 raided some top car marts in Lagos which were closed down on the orders of the CG Service, Col. Hameed Ali (rtd).
The comptroller general’s Strike Force and officers attached to the Federal Operations Unit (FOU), Zone ‘A’, Ikeja also stormed Berger, along Apapa-Oshodi Express Road and other premises across the state. The marts were alleged to be retailing smuggled vehicles.
Major car dealers, including Affordable Cars Limited, Carlink Limited, Ineh Mic Autos, Globe, Coscharis, Skymit, Arrowhead Motors, Wonder Wheels and Auto Point, among others were raided. Showrooms in other states, including Sokoto and Katsina were equally affected.
Speaking on the development, the Executive Secretary, Nigeria Automotive Manufacturers Association (NAMA), Remi Olaofe, blamed the development on our porous borders.
He said NAMA has proffered solution to the menace, adding that with their portal and that of the National Automotive Design and Development Council (NADDC), it would be 100 per cent impossible for anybody to import a vehicle and not properly register it in Nigeria because the portal would indicate that the appropriate amount of money was not paid.
“It is just as simple as that, but for reasons best known to the operators and the players in that market, they have refused to allow that portal to work,” he said.
He added, “You can’t be driving a vehicle that is not registered. To know this, they should go to the licensing office because the office cannot license a vehicle without first clarifying from the portal. If that is not there, we have what is called the BIN number, which will throw up a red flag”.
Deputy Managing Director, Massilia Motors, dealers of Mitsubishi vehicles said most car dealers, including Massillia Motors are still selling their old stock and that his company had stocked up to December for the 2021 business.
According to him, vehicle sales have shrunk and that dealers have not really made major decisions in 2021 in terms of vehicle imports.
Jaiyesimi said, “To the assemblers, they are not happy with the Finance Act; it’s making the locally assembled vehicles uncompetitive compared to the fully built units.
For instance, the Fuso and Canter (Mitsubishi) that we are assembling, it is cheaper to bring them in as FBU than locally assembling them. And that has affected our production lines.”
A member of the United Berger Motor Dealers Association (UBMDA) in Lagos, Chike Ejogu, disclosed that dealers evaded Apapa ports because of the high duties paid to clear vehicles there.
According to him, that was the major reason dealers resorted to smuggling vehicles at cheap rates in order to make big gains.
Ejiogu said, “The whole thing worsened in early 2016 when the land borders were closed. Before the closure we used to pay N74, 000 and N96,000 for small cars while we were paying about N170, 000 for big vehicles like SUVs.”
He revealed that about 5,000 vehicles were smuggled through the Idiroko land border every month.
The Chairman, Allen B Motors Nigeria Limited, Lawal Azeez, said car smuggling has caused the government a fortune.
He however said reduction of duties paid to the government will help to discourage smugglers from their illegal operations.