Contrary to the initial agreement to peg the age limit of imported used cars at 12 years, the new vehicle identification number (VIN) valuation system has reduced the age limit to nine years, provoking fresh concern among Nigerians.
Given this development, the adoption of the VIN valuation system by the Nigeria Customs Service (NCS) has gradually started easing off the importation of old fairly used cars popularly known as ‘tokubun’ cars.
Since the introduction of the electronic valuation system for the determination of the duty to be paid on imported cars, several issues have cropped up leading to disagreement between Customs, auto dealers, and freight forwarders.
Some of the issues include benchmarking of import duty on cars without consideration to depreciation value and the age limit of cars coming into the country.
With the new Customs valuation system, all imported used cars ranging from 2000 to 2013 models that are captured in the valuation system are expected to pay the same import duty irrespective of the year.
Meanwhile, two months back, Anthony Udenze of the Tariff and Trade Department at Customs headquarters, said that the new age limit for imported vehicles has been reduced to 12 years from 15 years. He warned that imported cars above 12 years would be impounded by Customs.
According to a Customs document tagged ‘Ex-Factory Price VIN-Valuation,’ exclusively obtained by BusinessDay, 2000 to 2013 models of Toyota Sienna are expected to pay N483,000; 2000 to 2013 models of Honda Accord are to pay N367,000 as import duty; 2000 to 2013 models of Lexus RX350 are to pay N674,000 and 2000 to 2013 models of Lexus ES350 are expected to pay N609,000 as import duty.
Cars such as 2000 to 2013 models of Hyundai Accent are to pay N233,000; 2000 to 2013 models of Hyundai Elantra are to pay N292,000 while 2000 to 2013 models of Hyundai Santafe are to N399,000 as a duty.
Also, popular cars such as 2000 to 2013 models of Nissan Pathfinder are expected to pay N484, 000; 2000 to 2013 models of Toyota Corolla are to pay N290,000 as import duty; 2000 to 2013 models of Toyota Rav 4 are to pay N396,000; 2000 to 2013 models of Toyota Camry are to pay N336,000 as duty while 2000 to 2013 models of Toyota Highlander are to pay N528,000 duty.
Sandra Omole, a clearing agent who specialises in the clearing of vehicles told our correspondent, that dealers and their agents are concerned that Customs is now using the new valuation system to reduce the age limit of imported vehicles to nine years.
Read also: Bittersweet boom of ‘Tokunbo’ cars in Nigeria
Omole, who noted that people usually bring in old models of cars that are within 10 to 15 years of age to reduce cost and the amount they pay as import duty, said the closer the age of the car, the costlier it becomes to bring it into the country.
According to Omole, the new valuation system would soon take car ownership away from the hands of poor Nigerians as there would be nothing like affordable cars again.
Jewel Igwe, deputy chairman, PTML chapter of National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), who expressed worry that the initial arrangement of the policy was to peg the age limit of vehicles at 12 years from 15 years, said people were surprised to see a further reduction to nine years.
Igwe added that there is no database or chart for both standard VIN valuation and non-standard valuation, a development that does not help freight forwarders or importers to plan ahead for the clearance of vehicles.
Another issue around VIN valuation is the clearance of some vehicles their data and history are not captured in the Customs valuation portal known as non-standard vehicles.
Some of such vehicles are Mercedes M Class, some brands of Toyota, BMW, and Lexus with 17 digits. As a result, importers of those vehicles are compelled to interface with Customs officers, many of whom are using such opportunities to exploit them.
This, Igwe said, has resulted in their clearance being a subject of negotiation between importers and Customs officials.
On his part, Rilwan Amuni, an official of the Association of Nigerian Licensed Customs Agents (ANLCA), said the amount required to clear a vehicle at the port is now more than the purchase price of the vehicle.
According to him, Customs is arm-twisting the clearing agents and dealers to generate revenue for the government.
He said that was why there are many uncleared vehicles at port terminals due to the high cost of clearing. He added that the vehicle identification number valuation system was tacitly used to increase the import duty on vehicles coming into the country.
Reacting to the issue of cost, Uche Ejesieme, the public relations officer of Tin-Can Customs Command, said automation is the latest trend all over the world, which is why Nigeria Customs is now ready to follow the trend.
He said that every grievance raised by the agents and their dealers on the VIN-Valuation is being worked on and that the NCS is ready to train the Data Direct Officers who input the agent’s vehicle data into the system.
“On the part of the cargo not being cleared, according to the Customs extant law, if a cargo is not moved out of the terminal for 28 to 29 days, it would then be treated as overtime cargo,” he said.
