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Monday, 19 October 2015

FG may cut car import tariff

Two years after the introduction of a new automotive
policy, which imposed a higher tariff on imported
vehicles, a review may be in the offing.
Reprieve appears underway for car dealers and buyers
following plans by the Federal Government to review its
import tariff on vehicles. This is expected to bring
down the cost of new vehicles and increase the tempo
of business in the nation’s automotive sector.

According to The Punch, Sources at the Federal Ministry of Industry, Trade and
Investment gave the indication on Sunday that the
current 70 per cent tariff on imported cars could get a
downward review as a way to force down the prices of
vehicles.
Although the National Automotive Design and
Development Council, an agency under the ministry,
said on Friday that 14 out of the 25 registered
automakers had started assembling vehicles in the
country, Nigerians have yet to enjoy the expected
benefits of the new policy as the prices of vehicles are
still high.
Even car dealers have had to adopt different strategies
to encourage buyers and boost sales.
The sources, however, said the planned review, which
is in tandem with the change mantra of the
Muhammadu Buhari-led administration, should not be
interpreted as an outright cancellation of the auto
policy, which was announced in September 2013.
“It is likely to come in the form of a review of the
import tariff on vehicles so as make it easy for people
to buy new cars. The decision on the entire auto policy
is expected to be part of the economic policy of the
government, which will be unveiled as soon as the new
ministers settle down,” one of the sources said.
Car prices were increased last year by about 60 per
cent shortly after the import tariff went up from 22 per
cent to 70 per cent, a situation, which made it difficult
for many to buy new cars, just as fleet buyers such as
corporate firms have had to cut down on the number of
vehicles purchased.
The imposition of the new import tariff, which also
affects imported used vehicles, according to the
government, is to encourage local assembling/
production of vehicles, with the attendant benefits of
creating more jobs and boosting the nation’s economy.
A zero per cent was announced as tariff on imported
vehicle components (Completely Knocked Down units)
and auto assemblers are also allowed to bring in fully
built vehicles at very low import tariff.
But some stakeholders, including major dealers such as
Toyota Nigeria Limited, had complained about the
timing of the policy and the seeming poor state of the
needed infrastructural facilities for the sustenance of
local assembly plants.
The Chairman of the automotive group, Lagos Chamber
of Commerce and Industry, Mr. Oseme Oigiagbe,
confirmed that the group had written to the Presidency
and suggested a number of proposals on the
implementation of the auto policy, and recently
participated in some meeting sessions called by
relevant government agencies/officials on the issue.
In an interview with Punch correspondent, he specifically
called attention to the issue of unstable power supply
and the commencement date for the new import tariff
as contentious issues that needed to be urgently
reviewed.

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