Industrial Unrest: Customs plays fast one on importers, freight forwarders, changes 15% NAC to import levy


… As ANLCA seeks reduction of levy to 5%

Apparently in a move to avert further industrial unrest at the seaports as a result of the imposition of the 15% National Automotive Council (NAC) levy by the federal government, the Nigeria Customs Service (NCS) has changed the NAC levy to import levy.

It will be recalled that the NCS recently announced its migration from the old version of the Economic Community of West African States (ECOWAS) Common External Tariff (2017- 2021) to the new version (2022- 2026) which came into effect on Friday, April 1, 2022 in-line with the World Customs Organization (WCO) five years review of the nomenclature.

According to a statement by the National Public Relations Officer of the NCS, Timi Bomodi, the contracting parties were expected to adopt the review based on regional considerations and national economic policy.

Bomodi disclosed that the nation had adopted all tariff lines with few adjustments in the extant CET.

He said, “As allowed for in Annex II of the 2022-2026 CET edition and in line with the Finance Act and the National Automotive policy, NCS has retained a duty rate of 20% for used vehicles as was transmitted by ECOWAS with a NAC levy of 15%. New vehicles will also pay a duty of 20% with a NAC levy of 20% as directed in Federal Ministry of Finance letter ref. no. HMF BNP/NCS/CET/4/2022 of 7th April 2022.”

However, the freight forwarders rejected the imposition of the 15% NAC levy on used vehicles arguing that it was done in bad faith and with the intent to rip off Nigerians.

The freight forwarders, in a bid to protest the NAC levy, scheduled to commence withdrawal of service from the ports on Monday 25th April, 2022 but have to postpone it by one week in view of sallah holiday.

But the freight forwarder discovered to their chagrin that the Service has changed the 15% NAC levy to import duty otherwise known as Import Adjustment Tax in its portal thereby leaving them helpless.

Speaking with Primetime Reporters on the development, the National Vice President of the Association of Nigeria Licensed Customs Agents (ANLCA), Dr. Kayode Farinto said that he was of the opinion earlier on that whoever that implemented that 15% as NAC levy goofed as according to him, the National Automotive Council was an Act No.6 of 2014 which stipulated that the NAC levy should be 2% of Cost, Insurance and Freight on fully built vehicles meaning that it was chargeable on new vehicles and not on used vehicles.

Farinto added that Nigeria having migrated to the Common External Tariff which provided that used vehicles among member nations
should be cleared at 20% duty, had no choice than to revert to 20%.

“So, whoever has implemented that 15% NAC actually made a mistake. But what we noticed this morning is that they have changed it to levy. There is a proviso in the law among member nations that allows them to implement what is called Import Adjustment Tax which is a levy. Maybe, that is where they now want to hide under, but even at that, we are appealing to the federal government to look at the citizenry and be compassionate. Even if they want to implement the levy, let it not be more than 5% because it is Import Adjustment Tax.

“Government is looking at how to generate money at all costs from all angles but slamming another 15% levy on used vehicles is negating a lot of principles and is going to cause another chaos and hardship in the industry and we hope that the government will listen and do the needful”, he said.

Asked if freight forwarders were still going to withdraw their services following the recent development, Farinto who is also the Managing Director of Wealthy Honey Investment Limited has this to say, “There’s no freight forwarding association gearing up for strike action. The President of NAGAFF was the one calling me. I make sure we have contact on a daily basis. There was no freight forwarding association that clamoured for strike action but we have some freelance freight forwarders and we have some people that I can call cloud chasers who want to use this opportunity to continue to milk some innocent and ignorant importers who will tell you that they want to embark on strike action.

“I can tell you authoritatively that we are not going on strike for now. Even this 15% NAC levy that was changed to levy, we will explore all diplomatic avenue and dialogue to plead with the Federal Ministry of Finance, I am in contact with the House Committee on Customs to see what they can do at plenary to either raise a motion to compel government to look at the economic situation of this country to see how this 15% levy can be reduced to 5% in the interest of the nation.

“This thing is supposed to be for new vehicles to support the local assemblers and that is why I said it is a misnomer to implement it abinitio on used vehicles because what is the value of these used vehicles?”

Also speaking, the Public Relations Officer of ANLCA, Tincan Island port chapter, Onome Joy Monije told our correspondent that they woke up yesterday’s morning to notice that the Service had changed the NAC levy to import levy in their portal without any form of communication to stakeholders.

Monije who claimed that they don’t pay levy in vehicles before now but 7% duty, ETLS and VAT added that, “You know, we wanted to shut down the port because of this 15% NAC levy, we are waiting for our leaders to visit the Ministry of Finance first because we have met with the Customs and customs said that the NAC levy was a directive from the Federal Ministry of Finance. So, when they hooked up to meet with the Federal Ministry of Finance, they now agreed to meet with them (ANLCA leaders) after the Sallah celebration.

“Maybe, customs is trying to play a fast one that. We woke up this morning, instead of seeing NAC levy, we are now seeing levy and you know that levy, we cannot fight too hard on that because it is actually a government policy. The government inputs levy on trade items from time to time. We can only ask for lower percentage of levy.

“So, what we are appealing to the government is that they should be able to reduce the rate of levy so as to help the masses. If the government should reduce the rate, it will be better for us. If government can say, okay, because oil revenue is dwindling and the hope of the country now lies with the maritime, pay 5% of levy, it will be okay. But they are just making us to believe that they don’t want to come down from 35% duty and levy.

“If they are moving from 15% NAC levy to 15% levy, it means that they are indirectly telling us that they don’t want to come down from 35% which is not good for the economy. They should reduce the levy to 5% so that both duty and levy will amount to 25% which will be okay. But if they can remove the levy totally, we can be happy but if they insist that there must be levy because of the cost of running government, we will plead with them to peg it at 5%.”

Photo: Col. Hameed Ali (rtd.), Comptroller General of the Nigeria Customs Service.

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