How VIN valuation policy cripples purchasing powers of average Nigerians for tokunbo vehicles

Segun Oladipupo

Stakeholders in the freight forwarding subsector have stated that even though the newly introduced electronic vehicle clearance system, known as Vehicle Identification Number (VIN) Valuation, has brought some level of sanity into vehicle clearance process,  but they lamented that all is not rosy as the duty paid on vehicles has taken used cars out the reach of ordinary Nigerians.

Recall that a chunk of the population is at the mercy of used vehicles in Nigeria owing to high cost of new cars. 

Stakeholders had clamoured for an electronic system that would solve the problem of incessant alerts on cleared vehicles, corrupt tendencies, human contacts, as well as delay in clearing time.

As a result, the new technology was introduced by the Federal Ministry of Finance after several electronic systems earlier adopted could not solve the issues raised by importers and their agents.

 Hence the eventual introduction of Vehicle Identification Number (VIN) Valuation system.

Though the system was greeted with resistance by agents when it was newly introduced because the agents and the principals had alleged that they were not carried along in the configuration and execution of the system.

With its introduction, even though some of the clogs have been removed, new developments arose among which are that vehicles older than 12 years were banned from being imported into the country

The Federal Government had argued that Nigeria was not a dumping ground for ramshackled vehicles but the cost of clearance of the authorized vehicles, has taken the vehicles out of the reach of ordinary Nigerians. 

The NCS valuation system was configured to recognize cars within the age limit of 13 years 

Thus, car dealers,  clearing agents, even prospective car buyers have raised the alarm that the new policy has automatically crippled the purchasing power of average income earners.

One of the agents who spoke with our correspondent lamented that the least duty payable on any car in the port now costs nothing less than N1.7 million.

He added that the high duty is not unconnected to the high foreign exchange rate in the country.

Godfrey Emeka Nwosu, Chairman, African Professional Freight Forwarders and Logistics of Nigeria (APFFLON), Tincan Island Port chapter said that though some encumberances have been removed from the clearing procedure, all is yet not what is expected. 

According to Nwosu, the clearance procedure is still rigorous but the agents are good with it because it is better that what obtained before now.

Outspoken Nwosu said that before the introduction of the electronic system, average Nigerians could afford a Toyota Corolla with 1m or less for home used one.

“Presently, to get a used car popularly known as tokunbo out of the port, costs nothing less than 2.5m. High exchange rate is the reason,” he averred.

“The introduction of VIN Valuation has taken wishes of intending car owners beyond reach. Before now, an average Nigerian of medium income can afford a Toyota Corolla with 1m or less for home used one. 

“The least duty for clearance of vehicle in the port is N1.7m. The clearance procedure though rigorous, operators are good with it now. Human contacts are reduced reasonably,” he submitted.

Mr. Ojo Peters Akintoye, the Chairman, Tincan Island Port chapter of the Association of Nigerian Licensed Customs Agents (ANLCA), lauded the system, saying it is a welcome development but added that the only limitation is in the years of cars that could be imported into the country.

The ANLCA boss added further that the high cost of clearance has led to reduction in importation of cars into the country through the ports.

“In my personal opinion, this is a welcome idea, apart from the limitation of years. Honestly, VIN with standard chassis is best to happen to us in cars clearance.

On the average cost of duty payable on imported used cars, he maintained that it depends on the type of car one is clearing.

Akintoye said that the clearance system had become seamless and reduced human contacts in the various Customs units like valuation, even as it also reduced incessant alerts that the agents used to get on already cleared vehicles.

Speaking further, Ojo observed  that the introduction of the electronic clearing system had reduced corruption by 70 percent because it does not encourage physical contacts between freight forwarders and Customs operatives. 

Comparing what used to be and what presently obtains, he averred that the high duty coupled with inflation in the country, importers have reduced the rate of importation of cars into the country. 

“There is serious reduction in importation of cars because of the limitation to 12 years and inflation in world economy coupled with exchange rate that’s going up everyday, that has reduced the output of importation generally.”

Uche Ejesieme, Public Relations Officer (PRO), Tincan Island Port Customs command explained that the new electronic policy was intended to harmonise values across board consequent upon request by stakeholders. 

According to him, the system was designed for seamless clearance process for compliant importers

He maintained that for the policy, the service was created to execute government policies and that it does not have powers to go against the stipulations of government.

“Firstly, it may interest you to know that VIN VALUATION POLICY is intended to harmonise value across board consequent upon the request by stakeholders to that effect.

“Infact beyond being in tandem with global best practices, its also designed to enable compliant importers to enjoy seamless clearance process and transactional predictability.

“On the issue of overaged vehicles, it is instructive to note that federal government policy on the subject is clear and unambiguous and Nigeria Customs cannot afford to automate against any Federal Government policy.”