Freight forwarders operating in the Nigerian maritime industry have applauded the recent directive of the Comptroller General of Customs, Col. Hameed Ali (rtd.) to unit heads and Area Controllers on detained vehicles at various customs formations across the federation.
It will be recalled that the Comptroller General of Customs, Col. Hameed Ali (rtd.) recently directed that henceforth, all vehicles detained or subject to detention should be allowed to pay correct and complete customs duty with the 25% penalty levy.
The circular however noted that all vehicles seized and taken into customs custody (condemned by competent court of jurisdiction in accordance with the provision of Section 167 of the Customs and Excise Management Act (CEMA) Cap C45 LFN 2004) should not enjoy the privilege consented above.
“Consequently, it shall attract the penalty prescribed in Section 167 referred thereto”, it said.
Reacting to the directive, the founder of the National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Boniface Aniebonam described it as one of the most popular policy initiatives that the government had taken.
He further observed that it was quite interesting to issue the directive as the subject matter was trade arguing that government must separate absolute prohibition and prohibition other than trade of prohibited goods.
“What I am talking about is trade goods that are under prohibition could be as a result of fiscal policy of government and so, when you go contrary to that, there should be a penalty for that because it is contained in the customs law. So, they have taken the right decision and I doff my cap for the Comptroller General of Customs”, he said.
While maintaining that the law was extant, he reminded the trading public that the service had not suspended the customs law noting that the leverage the customs had given by opening the window for people to pay their duty was not everlasting as it was within a reasonable time.
He said, “This could be a fall out from the suspension of the auto policy, don’t forget that the Comptroller General of Customs had already made an appeal to the government to take a second look on matters of rate of duty for vehicles because the rates are high including the levy. It will create a lot of problem for people to pay such amount of money and that has increased the smuggling activities through unapproved routes.
“The Board of Customs couldn’t have taken any decision other this now; you will agree with me that he present Comptroller General of Customs is not interested in the sale of auction wherein gold diggers and those who reap where they did not sow thrive. He may not want to encourage that and trade goods with trade infractions have a leeway. We in NAGAFF are saying that it is of no consequence for us, they are trade goods but modus operandi could change wherein the owner can make a formal application because the goods have seized.
“So, if you look at section 4 and 5 of the customs law, the powers of the Board to make decisions and reverse certain action for the good of the trade, customs are to encourage trade not to kill trade but when things come to absolute prohibition, firearms, manila, cocaine, it is no go area.”
On his part, the National Vice President of the Association of Nigerian Licensed Customs Agents (ANLCA), Dr. Kayode Farinto argued that the directive had no direct impact on the industry as it would only impact on the revenue of the Nigeria Customs Service as according to him, the service was only out to boost its revenue profile.
“They have also seen that they are likely to have problem in the area of auction, that is why they are bringing in this initiative”, he submitted.
He however agreed that the action of the Comptroller General of Customs was backed by the Customs and Excise Management Act (CEMA), which he said prescribed stiffer penalty on account of default by any individual or group.
“It does not really have any effect on the business but what they failed to tell us is that after this, there may not be this window again because they have succeeded in encouraging those that succeeded in bringing in their vehicles through illegitimate means meanwhile some people must have paid through their nose from the seaport. It is not enough deterrent, it will be enough deterrent if part of these vehicles have been condemned, government seized them and sell them to the poor, it will serve as deterrent but this one that they are doing, it is like beating a child with one hand and still patting him with the other hand. But this one they are doing now, they will just say, let us give them up to three months, customs will still call us to come and pay duty and collect our vehicles. It is not serving as deterrent, it is a cosmetic approach and it is a carrot and stick diplomacy.
“What the government should have done is to look at the newer vehicles, remove the levy on them. That is the only thing that can encourage them the bring in newer vehicles through the seaports because most of the people that are bringing in these vehicles through the bush paths, it is the levy that is actually driving them into doing that because they are supposed to pay 35% duty and 35% levy, that is 70%. Where is that one happening? Even with the 25% penalty levy, it still favour them particularly the newer vehicles there because in the port here, you will pay 35% duty and 35% levy and what it means is that if you are bringing in your vehicle, maybe 2019 model, you pay 35% duty and 25% levy as penalty.
“Government should begin to create enabling environment and one of the enabling environment is by crushing out the levy on new vehicles. If you look at what is happening now, the rate at which we are importing used vehicles particularly accidented vehicles is increasing because the duty payable on newer vehicle is too astronomical, it is killing the economy. So, government should just abrogate the levy so that people will now come back to the seaport. The moment this is announced, I assure you that more than 70% of these people will divert their vehicle importation back to the ports”, he submitted.
Responding, the Public Relations Officer of the Tincan Island Port command of the Nigeria Customs Service, Mr. Uche Ejesieme while expressing doubt on whether there was any time frame embedded in the circular, however said that the directive showed that government was actually listening to the cries of her people.
“For the CGC to have taken up that issue with the Presidency and getting authorization for implementation of that, it simply means that government is not being docile. Don’t forget that everything is geared towards ensuring that instead of you allowing yourself to be harassed on the road by the security operatives, government has created a platform for you to go and regularize which is a very good thing and just with a minimal 25% penalty just to make you feel the little pain of circumventing government processes and procedures.
“Ideally, those things are supposed to be seized but government in its wisdom decided to use this measure to cushion the effect and that is the underlining reason behind that.
On insinuation that the measure favours smugglers more as they would be made to pay only duty without levy on the newer vehicles detained at various customs formations, he said, “No! If it is a brand new vehicle, levy must be applied with that penalty because for now, the fiscal policy says that brand new vehicle pays 35% of the CIF and also 35% levy and you know duty and levy are the same thing, so we are talking about 70%. And if it fairly used vehicle, it is 35%, no levy. So, if you have a brand new vehicle with regards to the circular, you are coming to regularize, they must calculate levy for you provided it is a brand new vehicle. If you have a fairly used vehicle, you don’t have to worry about levy, the only one you will be talking about is the penalty levy of 25% which is mandatory. “
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