SAD: FG to Increase Tariffs on Imported Cars by 50 %

FG to Increase Tariffs on Imported Cars by 50 %The Federal Government has raised tariffs on imported cars and buses, with the increase in tariffs on both new and used cars reaching 50 per cent. The increase will take effect from January 2014.Imported fully built unit (FBU) cars, which total tariffs stood at 20 per cent in the past, will now attract 35 per cent duty and 35 per cent levy, totalling 70 per cent charges.The new policy was contained in a memo issued by the Coordinating Minister for the Economy and Finance Minister, Dr. Ngozi Okonjo-Iweala, which was sent to the Comptroller-General of Nigeria Customs Service (NCS), Dikko Inde Abdullahi, in which the minister also stated that the duty on buses had also been raised from 10 per cent to 35 percent without levy.FG aims at cutting down importation of automobiles to encourage production of cars and buses in the country. The government also hopes this would create an environment to support existing assembly plants and attract other Original Equipment Manufacturers who have expressed interest in NigeriaAs part of the policy, local auto manufacturers will no longer pay duties or levies on their Completely Knocked Down (CKD) sets imported from their overseas partners while Semi-Knocked Down (SKD) components for the local production of vehicles shall attract only five per cent duty without levy."We welcome the initiative. It was long overdue. This is one policy that will help the local industries discover themselves," said Stallion Motors spokesman, Mr. Manny Philipson, who spoke with LEADERSHIP correspondent on the issue on November 21, 2013, Thursday.With the policy becoming effective in January next year, prices of imported cars and buses are expected to rise astronomically as a result of the increased import duty.Analysts predict as much as 250 per cent rise in prices of imported vehicles.Some importers have expressed fears that the new policy could promote smuggling activities.The minister's directive dated November 14, 2013, was also sent to Federal Inland Revenue Service, destination inspection service providers at the nation's seaports and airports, namely Cotecna Destination Inspection Limited, Global Scan System and SGS Nigeria Limited.It stated that the approval for the introduction of the new fiscal measures was granted by President Goodluck Jonathan.