Vehicle importation

Vehicle imports drop 40% as customs clearance fees soar

The was a drop of around 40 per cent in the number of imported vehicles that entered the country between January and October this year through Ports & Terminal Multipurpose Limited compared to the figure for the same period of the previous year .

While a total of 192,287 vehicle units entered Nigeria in the first 10 months of 2021, only 114,159 units were imported through the same terminal during the same period in 2022. The terminal is responsible for l importation of most vehicles from Nigeria.

A document obtained exclusively by our correspondent from the customs public relations officer in charge of the PTML terminal, Muhammad Yakubu, showed that from January to October 2022, only 122 ships docked in ports compared to 167 registered ships during the same period in the previous year.

The document also showed that the terminal registered a total number of 30,560 containers in the first 10 months of 2021 compared to 24,181 registered during a similar period of the current financial year. These figures showed a sharp drop in activity at the terminal, which is known to be a Roll-On-Roll-Off terminal in Nigeria where nearly 85% of imported vehicles entering the country transit.

Customs clearance agents operating in the country’s maritime industry blamed inconsistent government policies and the new vehicle identification number for clearance of imported vehicles as reasons for the decrease.

The president of the PTML chapter of the National Association of Government Approved Freight Forwarders, Mr Thomas Alor, also blamed the tax imposed on imported cars by the government for the drop, adding that the VIN did not give them the value. which they had paid.

He said: “The levy, which they imposed on imported used cars, is what affects the import of cars. What causes the decline in vehicle imports is the value of customs clearance. The VIN appraisal does not give us the value we are paying now.

“What made the value high was because of the tax on older vehicles; this is the reason for the high cost of customs clearance for these vehicles. When we started VIN valuation we paid the normal duty with the percentage duty until the government now imposed levies on older vehicles which has now increased prices.

Although he admitted the levy had been there before now, Alor, however, said it was not up to 5% compared to the 15% clearing agents were now being asked to pay.

He said: ‘The levy was there, but it was less than 5%, but now it’s around 15%. Every time we engage customs on the issue of value, they tell us we asked for the VIN. And we say yes, we asked for the VIN, but the VIN was not well articulated as we asked them to; they then imposed levies on it and the high levy drives up the value.

“Now some ships are only equipped with 45 vehicles; some even come with less than that. The only time they had a huge import of vehicles here was like two or three ships that came with damaged vehicles. Following the introduction of the VIN and the tax, the import of vehicles dropped drastically. There are times here at PTML when nothing happens and people just play here. Some vehicles transit through other terminals as containerized cargo.

A former president of NAGAFF, PTML chapter, George Okafor, said the reduction in imports was more than 40%.

Okafor said: “It is no longer news that we have a nearly 61% reduction in the import of vehicles, it is very clear and open, it is an open fact and it is caused by policies. The VReg (Vehicle Registration System) causes problems; while I’m talking to you now, getting VReg is hard and without it you can’t access anything. So all this makes it difficult for cargo and vehicle clearance out of ports; it is not a hidden thing.

“We are in a situation where a ship will come and deliver almost everything to Cotonou and the little one we have here will be difficult to clear customs.”

He said smaller vehicles that used to cost around 500,000 naira to clean now required more than 1 million naira, which was responsible for the high cost of cars in the market.

Okafor added: “The VIN always affects us because the values ​​of certain vehicles are high. You know that Nigerians rely so much on older vehicles because they are cheaper. Most wealthy Nigerians go for higher vehicles, you know in Nigeria it’s either you are upper class or lower class. And those in the upper class are buying vehicles from 2018 and they can afford to clean them up, but the lower class is so dependent on older vehicles. And these older vehicles are now very expensive to clean; vehicles we used to clean with N500,000 or N600,000 are now from N1m.

“The cheapest vehicle like the Toyota Corolla is now very expensive to clear customs. So after calculating the cost of purchase, shipping and customs clearance here in Nigeria, you will find that the car will be very expensive to buy for a middle class person.And the car will stall because you pay the same with what a 2014 model of the same car pays, so it will be hard to buy.

“So the people importing these cars aren’t even keen on doing the business anymore; if they bring the vehicles, a lot of people may not have the money to buy the cars. If you go to PTML at Mile 2, there’s hardly anyone there, because that’s where all these little vehicles go and TinCan is where the executive vehicles go. So you can see how it affects the whole thing.

Chairman of the PTML Chapter of the National Council of General Managers of Licensed Customs Brokers, Abayomi Duyile, said, “The VIN and the 30% levy are the causes of the whole problem. You know, when they introduced the VIN, it was part of what we were saying before that it was going to cause problems, but customs introduced it saying it would make their job faster and all that. About a month after introducing VIN they came with a 30% contribution from the National Automobile Council, and we protested, they have now removed it and changed it to a levy.

“So with all these things, you find out that more than 2 million naira has been added to the vehicle prices. And when (former president Olusegun) Obasanjo was there, they allowed 15-year-old vehicles in, but now customs, in their own wisdom, said they were old vehicles. Now, for example, a 2008 model car has been ranked with a 2013 vehicle in terms of duty payment.

“So when you bring in a 2008 model vehicle and pay duty for a 2014 model, it will be very expensive. So when you clear a 2008 model vehicle in 2013 or 2014 in Nigeria, you can go broke because there’s no way to sell such a vehicle when you clear customs cheaply at the 2014 rate, which is why you see the drop in PTML.

“Those are the two major issues when you say that importers of 2005, 2006 and 2009 vehicles should pay the same duty as 2013, this is not done anywhere else in the world. So you can imagine the people the system has affected, some of their vehicles are still in the port as we speak; some have also abandoned their vehicles because already there is no point in wasting money to clear customs for a vehicle that cannot be resold. Those that have been cleared take time to sell.

Dealers lament

Meanwhile, car dealerships have bemoaned a severe drop in footfall as cars now seem out of reach for ordinary Nigerians.

A car dealer in the popular Berger Car Market, Lagos, who called himself Chinonso Stainless, said Sunday punch that most dealerships have seen virtually no customers for months, contrary to what they used to see, especially as the Christmas season approaches.

He said, “Brother, nothing is happening here anymore because of the high duty rate; there aren’t many people bringing in cars anymore. Thus, there are fewer cars on the market and the prices are very high; buyer turnover is very low. Patronage isn’t what it used to be, people hardly buy cars anymore.

“A 2003 Toyota Corolla that used to sell for 2.5 million naira is now 3.5 million naira, while the 2010 model of the same car is 4.8 million naira. So we implore the government to reduce car taxes, because as soon as taxes are reduced, prices will definitely go down. »

Another dealer, John Paul, said, “People now prefer to buy Nigerian used cars rather than foreign used cars; even so, the Nigerian used car is also very expensive. You hardly see a clean Nigerian used car below 1.5 million naira; that’s how expensive cars are now.

The President of the Automobile Dealers Association of Nigeria, Metch Nnadiekwe, did not return his calls at the time of filing this report.

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