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Nigeria Loses 50% Duties On Imported Vehicles
For five consecutive years, the Federal Government of Nigeria has lost half of its revenue accruing from duties paid on imported vehicles as 50 per cent of vehicles come in illegally.
These vehicles come through the closed borders and seaports without payment of duties to the government treasury, an investigation by the Nigeria Auto Journalists Association (NAJA) has revealed.
The economic sabotage, which gained traction in the first quarter of 2016, when the land borders were closed by President Muhammadu Buhari-led Federal Government is perpetrated by either influential people/dealers who hand out signed documents to the Customs or bribe their way to clear the vehicles without due process.
In connivance with unscrupulous government officials, some dealers are treated as sacred cows and they are quick to get away with anything at the ports.
It was learnt that the illegal business does not stop at seaports alone; similar dealings have been reported in major land borders across the country, including Kpobe (Ogun State), Ijowu (Ogun State), Seme (Lagos State), Idiroko (Ogun State), Shaki (Oyo State), Daura (Katsina State), Baga (Borno State), etc.
It would be recalled that the Nigeria Customs Service (NCS) had September, 2019, raided some top car marts in Lagos.
The comptroller general’s Strike Force and officers attached to the Federal Operations Unit (FOU), Zone ‘A’, Ikeja stormed Berger along Apapa-Oshodi Express Road and other premises across the state.
Many of them were closed on the orders of the CG Service, Col. Hameed Ali (rtd), for allegedly retailing smuggled vehicles in the shops.
Major car dealers including Affordable Cars Limited, Carlink Limited, Ineh Mic Autos, Globe, Coscharis, Skymit, Arrowhead Motors, Wonder Wheels, Auto Point, among others, were raided. Showrooms in other states, including, Sokoto, Katsina were equally affected.
The second-hand vehicles dealers were not spared as most of their showrooms were equally closed too due to reasons that have to do with documentation.
Commenting, the Executive Secretary, Nigeria Automotive Manufacturers Association (NAMA), Remi Olaofe, said, “you can’t say there is no smuggling in Nigeria; our borders are porous and we have done everything we needed to do to improve it, by shutting down the borders, but they are still porous.
Olaofe said it is a fallacy to say for every vehicle coming into the country, appropriate duties are being paid.
Stating that NAMA has proffered solution to the menace, Olaofe said that with their portal and that of the National Automotive Design and Development Council (NADDC, it will be 100 per cent impossible for anybody to import a vehicle and not properly register in Nigeria because the portal will indicate that the appropriate amount of money is not paid.
“It is just as simple as that, but for the reason best known to the operators and the players in that market, they have refused to allow that portal to work”, he said.
Advising that vehicles must be registered for them to be driven on the road, Olaofe added that “You can’t be driving a vehicle that is not registered. To know this, they should go to the licensing office because the licensing office cannot license a vehicle without first clarifying from the portal and that clears the vehicle. If that is not there, we have what is called the BIN number, will throw up a red flag”.
Explaining further, Olaofe said, “I don’t represent the (FBU) Fully-Built Vehicle, mine advocacy is for us to shut our doors against the FBUs. Assembling of vehicles in Nigeria is what I represent”.
Confirming that the duty waiver for vehicles has been adjusted, but there is no difference in the rate of vehicles, the executive secretary said, “We are saying that it is not a duty that is affecting the rate we are paying as transportation fare.
“But the factors are the cost of fuel, infrastructure, security on the road, wear and tear, replacement of these spare parts and the conditions of the vehicles. They bring a lot of junks into this country.
“Africa Bilateral Free Trade Agreement has taken off, where is Nigeria in the scheme of things? Assembly plants are now moved to Ghana, what do we stand to benefit from?
“Toyota, Hyundai and co are being assembled in Ghana, are those for Ghana economy? They are for Nigeria economy”, Olaofe added.
The Deputy Managing Director, Massilia Motors, dealers of Mitsubishi brand of vehicles, Kunle Jaiyesimi, said most car dealers, including Massilia Motors, are still selling their old stock and that his company had stocked up to December for the 2021 business.
According to him, the car market has really shrunk and that dealers have not really made major decisions in 2021 in terms of vehicle imports.
Jaiyesimi said “to the assemblers, they are not happy with the Finance Act; it’s making the locally assembled vehicles uncompetitive compared to the Fully Built Units. For instance, Fuso and Canter (Mitsubishi) that we are assembling, it is cheaper to bring them in as FBU than locally assembling them. And that has affected our production lines.
Jaiyesimi, who is also the chairman, Auto Group of the LCCI proffered solutions, saying that “the only way for us have some gain on the assembly line is for govt to remove the import duty or reduce it. If they cannot remove it, they can bring it down to five per cent”.
The DMD said that, for now, they are charging 40 per cent (35 per cent import duty and five per cent for levy) on passenger cars for FBU; 10 per cent on (Semi Knocked Down (SKD) and 10 per cent on FBU buses.
He argued that whatever duty reduction the government has put in place for them to enjoy is being wiped off by the exchange rate fluctuations, stressing that the CBN is not supporting vehicle importers at SKD or FBU level.
Rather, he informed that stakeholders rely on the black market to pay their suppliers.
“Once you are getting your FX from the black market, whatever gain that is coming from the import duty reduction is lost in the over 25 per cent increase in the FX rate”, Jaiyesimi added.
Further investigations, however, show that both new vehicle dealers and second-hand vehicles merchants are deeply involved in this business of short-changing the government.
A key member of the United Bergers Motor Dealers’ Association (UBMDA), Chike Ejogu, said that dealers evade Apapa ports because of the high duties paid to clear the vehicles there.
According to him, that is the major reason why dealers resort to smuggling in vehicles at cheap rates, to make big gains.
Ejiogu said, “the whole thing worsened in early 2016 when the land borders were closed. Before the closure we used to pay N74, 000 and N96, 000 for small cars while we were paying about N170, 0003 for big vehicles like SUVs”.
Ejiogu revealed that about 5,000 vehicles are smuggled through the Idiroko land border every month.
The Chairman, Allen B Motors Nig Limited, Lawal Azeez, said that car smuggling has caused the government a fortune.
According to the auto dealer, a reduction of duties paid to the government will help to discourage smugglers from their illegal operation.
Meanwhile, efforts made to get statistics of imported vehicles from various auto companies proved abortive.
Figures from Kia were not available as of the time of filing this report.
Although, Coscharis was also approached for the statistics the auto firm is yet to respond as of the time of filing this report.
The story is basically the same at West Star Associates Nigeria Limited, the sole distributor of Mercedes-Benz vehicles in Nigeria.
While different regions of the world make available sales statistics regularly, Mercedes-Benz representatives in Nigeria always turn down a request for sales statistics.
When contacted, a source promised to make necessary contacts within the company and get back to.
The source did not get back as at press time.
However, for the first quarter of 2021, despite the challenges associated with Covid-19, Mercedes-Benz Cars sold 590,999 passenger cars across the world driven by China and United States retail sales as well as strong demand for plug-in hybrids and all-electric vehicles
One of the implications of vehicle smuggling or duty evasion, is that the vehicles of these illegal auto dealers are sold easily at cheap prices because they never pay the right duty to get them into the country.
Consequently, the genuine dealers are left to suffer the outcome as they cannot sell vehicles lower than the actual cost of bringing them to the showrooms.
The Rivers State Chief judge, Justice Simeon Chibuzor Amadi has granted pardon to six inmates standing awaiting trial at the Port Harcourt maximum correctional center.
The six lucky inmates granted pardon on Tuesday by the state Chief Judge included Nwekeala Chizoba, Samuel Emmanuel, Aniete Kelvin, Ebube Fubara and Goddey Okpara who were on awaiting trial as murder suspects and have all spent between 10 years to seven years in the custody without a proper information filed against them in the court.
Justice Amadi during a special gaol delivery exercise last Tuesday at the Port Harcourt Maximum Correctional Centre opined that the special gaol delivery was part of activities lined up to commomerate the 2024/2025 legal year in the State and restated the commitment of the state judiciary in decongesting the correctional centre and ensuring that those inmates who are not supposed to be there are removed from the custody.
The state chief judge stressed the need for all stakeholders to work together to build a society that supports rehabilitation and gives a second chance to anyone or group of people who have fallen short of the expectation of the law and have been punished accordingly.
He stressed that the National Judicial Council(NJC) encourages judges to pay more attention to criminal matters to enable them to decongests the correctional facilities, noting that since his assumption into office, his administration has been able to reduce the number of inmates in Nigerian Correctional Centres and the Port Harcourt Correctional Centre in particular, to less than 2,000 as against the over 4,000 inmates previously in the faculty.
According to him, “as they release the deserving inmates, they affirm their commitment to justice, compassion and rule of law but that they must not forget the fundamental principles of justice delivery system which is truth and fairness, integrity and equality before the law.”
I encourage you all the released inmates to return to your families and become better citizens. You must not engage in action that will return you all back to prison. Let me say that while the judges show empathy to you all, it does not absolved individuals from being held accountable for actions against individuals, corporate organisations and state which the law frowns at, ”he stated
The Chief Judge thereafter stood down the exercise to enable the DPP to intervene to case files following the fact that majority of the persons listed to benefit from the exercise are facing murder charges and adjourned to a date that will come before December.
Earlier in his goodwill message, the outgoing state Comptroller of Nigerian Correctional Centre, Port Harcourt, Felix Lawrence, who was recently promoted to the rank of Assistant Controller General, commended the state judiciary led by Chief Judge, Justice Simeon Chibuzor Amadi for their continuous effort aimed at ensuring justice and decongesting the facilities.
Other activities lined up for the event included special church service at St Paul’s Cathedral , Anglican Communion, Rebisi Port Harcourt, inspection of guard of honour by the state Chief Judge mounted by officers of the Nigerian police and a special court session held at the ceremonial court hall.
By: AkujobiAmadi
The Director General of Rivers State Bureau on Public Procurement (RBoPP), Dr. Ine Briggs, has explained that the Sir Siminalayi Fubara administration plans to enforce transparency in governance through public procurement.
Speaking at a one-day Public Procurement Enlightenment workshop organised in collaboration with the State Local Government Service Commission for newly elected chairmen, vice chairmen, secretaries and leaders of legislative assemblies, Dr. Briggs said it is key for grassroot development.
She stated that the Sir. Fubara administration plans to reduce wastage and at same time infuse efficiency in public expenditure.
The RSoPP DG said the local government political office holders remain key drivers in the new vision hence the workshop is to arm them with knowledge on how to execute projects in tandem with needs of the people.
“ Your role in the prudent management of public resources is, therefore, not just administrative it’s the cornerstone of delivering the dividends of democracy. Every procurement decision you make must reflect a commitment to fairness, transparency and accountability” Dr. Briggs submitted.
One of the key goals of the administration she further reminded the participants was to use their offices to foster economic growth through public procurement.
She warned that the law establishing the agency empowers it to penalise defaulters, but that what is more important is voluntary compliance to the laws.
In addition to that, she said urged the local government council leaders that champion the practice and implementation of public procurement law.
On his part, Acting Chairman of Local Government Service Commission, Pastor GoodLife Ben Iduoku averred that the aim of the workshop is to arm key stakeholders in the local government system to generate new ideas, innovation and strategies in tandem with government policies and programmes.
The workshop dealt on various topics on procurement planning, methods, Understanding Bid Process, including types of Construction Contracts and law.
Some participants were awarded excellence and meritorious awards as part of the programme.
By: Kevin Nengia
The 19th anniversary of the National Association of Proprietors of Private Schools (NAPPS), Rivers State Chapter, recently ended in Port Harcourt in grand style, with participants from various schools including proprietors, the academia, civil society groups and top government functionaries charting the way forward for educational improvement.
The 19th NAPPS anniversary christened, ‘Innovation and Adaptation: Transforming Challenges Into Opportunities’ was held at Casoni Hotels, Port Harcourt.
In his remarks, the Chairman of the Rivers State Chapter of the association, Dr. Jaja Adafe Sunday expressed gratitude to the members and executives for their untiring efforts towards the achievements of the body.
He sought the intervention of government on the lingering crisis on the economy as it is affecting the running of schools.
He decried high cost of things including fuel and raw materials which has adversely affected the running of schools and payment of teachers.
Dr. Sunday hinted that the current economic situation in the nation is biting hard on the operations of schools, saying inflation, removal of fuel subsidy, fuel scarcity, poor electricity supply, tariffs and lack of government grants are some of the challenges faced by schools, and urged the members to brace up to the challenges, as it is the panacea to building a brighter future.
Guest speakers from the health sector and the academia thrilled the gathering on the essence of basic education which they said is the key to national development.
Former Dean of the Ignatius Ajuru University of Education, Professor Azuru and the Chief Medical Director of Meridian Hospitals, Dr. Odo Iyke were some notable guest speakers who delivered lectures at the occasion.
Some distinguished proprietors also got special recognitions and awards.
The 19th anniversary cake was cut by the Rivers State NAPPS Chairman with representatives of the state government assisting.