MARKET NEWS

Nigeria auto dealers have decried Nigeria Customs Service (NCS) new system of documentation and dual regime of duties as well as harassment of their members. They say the activities of men of the Customs are hurting their businesses.

The dealers are particularly complaining of the recent closure of vehicle dealerships across Nigeria, which according to them, has shown an agenda by the NCS to contrive its own import trade duties outside the rules established by the World Trade Organisation (WTO) that are binding on the country.

They specifically pointed out that if the arbitrary customs duties are not checked it would create a fertile environment for corruption to thrive in the Service, thereby causing more distress to buyers of new vehicles in the country.

It would be recalled that on September 29 this year, members of the Comptroller-General of the NCS strike force and officers attached to the Federal Operations Unit (FOU), Zone ‘A’, Ikeja, Lagos stormed the popular Berger auto market along Apapa-Oshodi Express Road, and other major car dealers’ premises across Lagos in search of what the Customs Public Relations Officer, Joseph Attah  said was “based on credible information that there were smuggled vehicles in these car marts, but the sealing is just temporary. As from this week we will assess the situation and advised them accordingly as to what they should do.”

Since then, all dealers shops have remained shut, regardless of Attah’s claim that “those not involved in any bad business were not shutdown. But I can confirm that some numbers have been shutdown. Within the week, customs will take a look at the records of each vehicle in these car marts and appropriate actions will be taken.”

A dealer  said they discovered at a meeting with the government’s agency that the Customs now has a new system of documentation and two regimes of duties as against the WTO prescribed import duties.

“The NCS duties system is whimsical because it is not based on any known indices and certainly not based on the World Trade Oganisation’s, which applies only duties determined as Freight on Board (FoB). This means the amount the manufacturer sold the product to the Nigerian or any other country’s importer, less the cost of shipment/transportation,” the dealer said.

He argued that the cost, recognised as FoB, is universal to every buyer of goods from the same manufacturer and so could be calculated for the sake of local duties in the destination country, for instance, Nigeria or Ghana. If the cost of FoB is different, then it must be on account of accessories in the vehicles and these can be calculated to arrive at the final costs on which FoB/Duties are based.

Regrettably in Nigeria, the dealers who met with Customs officials after the September 29 shutdown were stunned to find that there are two sets of FOB in two different documents.

One of the documents, titled ‘NATIONAL VALUATION DATABASE FOR IMPORTED MOTOR VEHICLES 2014-2019’ is believed to be baseless, according to the dealers who are certain that it was contrived based on the whim and caprice of the Nigeria Customs Service.

Those who saw this document described the FOB therein as outrageously high, more than 100 per cent higher than FoB in another document that surfaced during the dealers’ meeting with Customs that bore FoB ‘PRICES FOR 2019’ from a particular manufacturer.

The letter, bearing the updated cost and freight for all models of the manufacturer’s vehicles for 2019, based on which the local dealership pays to the parent company through the Central Bank of Nigeria, was addressed to the Comptroller-General of Customs and was approved in July, 2018.

As things stand, the local motor dealerships pay their duties based on the approved FoB from the manufacturers that the Customs are aware of and if not, could easily obtain it from each countries Embassies or High Commission.

“Obviously, this is not done, because after the dealerships get Customs clearance of their vehicles at the Ports using the approved duties, on the highways, unsuspecting buyers who just drove out of their showrooms are ambushed by Customs officials who brandish the so called ‘NATIONAL VALUATION DATABASE FOR IMPORTED VEHICLES’ that they know should not be in use, as it is illegal. Only those who have had to go through this ordeal can tell of their harrowing experience in the hands of these people,” another dealer pointed out.

Independent also gathered that on October 9, 2019, the Nigeria Customs Service Tariff and Trade, Valuation Unit notified dealers of the revocation of all approved pricelists, meaning NCS Headquarter approved FoB prices issued to companies had been revoked indefinitely. This, according to dealers, shows a lack of coordination within the NCS.

To this end, the dealers are calling on the President Muhammadu Buhari’s administration to save their business from harassment and arbitrary levies and duties from the NCS

“There must be a level playing ground for duty payment that is based on FOB, as it is done all over the world, meaning importers of a particular item must pay the same duty and this information should be made public and put online for the sake of transparency and should not be made secret, in-line with President Buhari’s anti-corruption mantra that brought him to power,” they posited.