Automobile dealers in Nigeria under the aegis of Automobiles Association of Nigeria (AAN) have picked holes in the arbitrary duties Nigeria Customs Service (NCS) may have imposed on automobiles, saying such duties negate the World Trade Organisation’s (WTO) rules.
The dealers suspect that NCS may have, following the recent closure of vehicle dealerships across Nigeria, contrived its own import trade Duties outside the rules established by WTO, which are binding on Nigeria.
The dealers, in a statement obtained by BusinessDay on Wednesday, recalled that on September 29 this year, members of the Comptroller-General of the NCS’s strike force and officers attached to the Federal Operations Unit (FOU), Zone ‘A’, Ikeja, Lagos, stormed the popular Berger auto market along Apapa-Oshodi Expressway, and other major car dealers’ premises across Lagos.
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The officers, according to the statement, were 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 advise them accordingly as to what they should do.”
Contrary to Attah’s claim, all dealerships have remained shut since then, regardless of those not involved in any bad business. “But I can confirm that some numbers have been shut down. Within the week, customs will take a look at the records of each vehicle in these car marts and appropriate actions will be taken,” Attah was quoted as saying.
Ademola Moshood, secretary of the automobile association, who signed the statement, said Custom’s subsequent meeting with the dealerships revealed that the government’s agency had a system of documentation and two regimes of duties that create a fertile environment for corruption to thrive within its fold to the distress of buyers of new vehicles in the country.
“The Customs Service’s Duties system is whimsical because it is not based on any known indices and certainly not based on the WTO’s rules, which apply 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 and transportation,” he explained.
He said this cost, recognised as FOB, was 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.
Moshood noted that the cost of freight was usually determined by charges from the country of origin of the product to its destination. For instance, there would be different freight costs for vehicles shipped to Nigeria from Dubai, which usually handles the Middle East and Africa markets and for those coming into Nigeria from South Africa, which is responsible for sub-Saharan Africa markets.
“Regardless, the FOB for the same products from either Dubai or South Africa remains the same, so also should the Duties. This system is used by Nigeria’s neighbour, Ghana, where dealers employ the FOB, which is online, to calculate their Duties, which is universal, as it is known to the manufacturers, importers, and buyers of new vehicles and this Duty is paid online to their Customs Service to the benefit of all parties.
“The payment of this Duty can be verified at the swipe of a card by whoever cares to know and will eliminate the setting up of road blocks by Customs, which obviously is misusing its manpower,” he said.
He said all embassies in Nigeria that have motor vehicle manufacturing companies servicing the nation’s auto market have the FOB costs of their products, which is universal and could be verified in Nigeria by the Customs.
“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, according to sources that are well-informed about the meeting,” the secretary said.
Continuing, he said, one of the documents, titled ‘National Valuation Database For Imported Motor Vehicles 2014-2019’ is believed to be baseless, as the sources are certain it was contrived based on the whims and caprices of the Nigeria Customs Service.”
