Import Adjustment Tax: APFFLON chides FG over policy somersaults, inconsistency


Following the recent suspension of the Import Adjustment Tax, IAT on the order of President Bola Ahmed Tinubu, the Africa Association of Professional Freight Forwarders and Logistics of Nigeria, APFFLON has expressed displeasure over the inability of government to think through every policy before going ahead to implement them.

It will be recalled that former President Muhammadu Buhari had in the twilight of his administration signed the new Finance Act which came along with it the Import Adjustment Tax among others. Under the new tax regime, imported vehicles with 2000cc (2 litres) to 3999cc (3.9 litres) engines will pay an additional charge known as Import Adjustment Tax (IAT) of 2 percent of the value of the vehicle while vehicles with 4000cc (4 litres) and above engines will attract IAT of 4 percent of their value.

The new levy is in addition to the 35 per cent import duty and 35 per cent levy being paid by vehicle importers.

However, announcing the suspension, the Presidential spokesman, Dele Alake stated that president Tinubu gave the order so as to address business unfriendly fiscal policy measures and multiplicity of taxes.

“The suspension of the extra levies on some imported vehicles is part of the presidential interventions to address key concerns of manufacturers and other stakeholders regarding some recent tax changes,” Alake told State House reporters at a briefing.

Reacting, the President of APFFLON, Otunba Frank Ogunojemite blamed the immediate past government for not doing due diligence and consulting widely before introducing that policy adding that many people had been forced to pay the tax before now even as he wondered what would become of the money that they had paid.

While contending that it was negligence on the part of the government not to have done the needful and for not considering the impact of the policy on the importers and port users, he recalled that it took the Nigeria Customs Service, NCS time to integrate the tax into its system. He maintained that as at the time the NCS was trying to integrate it into the system, licensed customs agents could not capture their jobs thereby incurring demurrage  which added to the cost of importation into the country.

“All of a sudden, you come back to suspend it. As I am talking to you, there is no job at the port because of policies like this. So, if it is being suspended, the cost of import is still increasing by way of rent to the shipping and terminal operators. While I will not blame the President, I will however, blame the Presidential Advisory Council which is responsible for most of these policies.

“So, I believe that most of these policies should be thoroughly x-rayed by experts before implementation otherwise you continue to see things like this. While I am not faulting the suspension, however, I am faulting the government’s inconsistency in policy formulation and implementation because it is the masses that feel the impact of these inconsistencies. Government needs to have consulted widely before implementation.

“We are battling with the petroleum subsidy removal, inflation, devaluation of Naira, so, one should expect that if the government wants to formulate policies that have bearing on the economy, it has to think it through. So, I am not happy with their inconsistency at this time. The government should be very careful in formulating policies. Introducing a policy and later on withdrawing it shows that you don’t know what you are doing and that you did not consult properly before implementing.

“So, for me, they need to listen very well, consult widely, and think through every policy before implementation”, he stated.

Ogunojemite, however, thanked President Bola Ahmed Tinubu for having a listening ear adding that, “If he had been adamant, there is nothing anyone could do. But he needs to be very careful, it is a new government and they don’t need to hurry over policies. So, kudos to them to have listened and reversed most of these policies at this time.”

Photo: Senator Bola Ahmed Tinubu, President, Federal Republic of Nigeria.

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