Customs & ExciseHeadlinesNews New vehicle import tariff in Nigeria may lead to drop in revenue in Benin Republic, Togo. By maritimemag February 2, 2021103 views ShareTweet 0 Abiola Seun | There are strong indications that Benin Republic, Togo, among other neighboring countries may suffer dwindling fortune from smuggling of vehicles into Nigeria as the new vehicle import tariff kicks off. The Federal Government of Nigeria had, in the Finance Act 2020, proposed slash of import duties on tractors, transport vehicles, and others to further cushion current socio-economic conditions in the country. President Muhammadu Buhari approved more tax incentives in the Finance Act, including, import duty reductions from 35 to 10% & 0% levies on tractors and transport vehicles. As at the weekend, there are palpable fears in the neighbouring countries who felt the commencement of the new vehicle tariff in February 2021 in Nigeria could signal an end to a vehicle trade market that’s among the highest revenue earners for these countries. To evade paying a huge vehicle import tariff at the country’s ports, some importers do import their vehicles through Benin Republic or Togo ports, paying less tariff and from there, smuggle them into the country through the land borders, despite ban on importation of vehicles through the land borders. However, importers and clearing agents, who spoke to our Correspondent, expressed hope that the federal government’s move will curb vehicle smuggling and ensure Nigeria do not become a dumping ground for used and accident cars. They equally believe the plan will also increase the revenue base of the Nigerian Customs Service(NCS) and invariably the federal government. Similarly, there are palpable fears among dealers of accident cars, who felt the move will lower the price of used and new vehicles, hence, Nigerians may gradually dumb the purchase of accident cars. The nation’s economy had recently suffered a major setback caused by the Covid-19 pandemic, the #EndSARS protests and now, recession. These, according to market analysts, have drastically reduced the purchasing power and disposable income of the people, even as inflation are heading for the rooftop.With all these scenarios in mind, the government decided to cut off some taxes out of which import duty of vehicles was factored, a development the PMB’s administration expects will at least lessen the financial burden on Nigerians. To this end, importers and clearing agents operating at the nation’s seaports said the slash on imported used vehicles and new vehicles may lessen patronage and smuggling of overaged and accidented vehicles into the country. The Association of Nigerian Liscenced Customs Agents (ANLCA) and the National Association Air Freight Forwarders and Consolidators (NAFFAC), the umbrella body of clearing agents in Nigeria, however, said the slash would reflate the economy but may fuel dumping of vehicles in the country. Speaking, public relations officer of the association, Kirikiri Lighter Terminal (KLT), Toyin Awujoola, said the slash would increase Customs revenue at the nation’s seaports. She said: “the slash is a welcome development and will make people bring in new cars and stop Nigerians from being a dumping ground. It will have effect on the economy.” “This is because the high charges is affecting the economy through revenue at seaports. We have some terminals that are majorly for vehicles but by the slash, it will enhance the revenue of the Nigeria Customs Service (NCS) as well as improve the economy so, we await the implementation,” she said. Similarly, the president, NAFFAC, Prince Adeyinka Bakare, said the policy will influence reduction in smuggling of vehicles into the country. According to him, the country should not be a dumping ground for accidental vehicles. “The slash will reduce smuggling of vehicles from neighbouring countries into Nigeria and smuggling will come down because the rising price of import duties and levies fuel diversion of vehicles to neighbouring countries. However, looking at rising rate of dollars, there may be no difference in the price because customs pegged dollar at above N300 to one dollars. “The port will be more busy because since we have a lesser duty, why will importers smuggle vehicles again. Also, the country should not be a dumping ground for overaged and accidental vehicles,” he pointed out © 2021, maritimemag. All rights reserved.