As vehicle imports drop, Customs and Tin Can Island argue over import duties

by Tunji Andrews

The stand-off between clearing agents, the management of the Ports & Terminal Multi-services Limited (PTML), Tin Can Island Ports Lagos, and members of the Nigerian Customs have continued to air their views on the implementation of the new duty regime. With the management of PTML calling for a review of the new duty regime on vehicles introduced by the Federal Government under the fiscal Policy measures for Automotive industry in Nigeria.

The automotive policy, allows for an importer to pay 35 percent duty and 35 percent levy on imported vehicles and Customs has started the collection of 35 percent levy on imported new vehicles, which was originally scheduled to commence in January 2015 after the implementation of 35 percent duty was flagged-off in July this year.

This has already began to take its toll, with reports in April, 2014, stating that the number of cars and other vehicles imported into Nigeria had dropped sharply in February from 11,563 in January to 7,400 units in February showing a decline of 38 per cent.

Receiving the Senate Committee On Privatization and Commercialization during an oversight visit by members of the Committee to its offices at Tin Can Island Port on Tuesday, September 16, 2014, the company’s Executive Director, Mr. Askanio Russo alleged that because of the policy, the Terminal in the last three months has recorded a dramatic drop in vehicles discharged.

He attributed this to the non-uniform practices by the Customs Command which oversees the Terminal and Tin Can Island. Russo alleged that the Customs uses Ex-Factory prices and valuation assessment for used vehicles discharged at the Terminal that are different from that obtained at other Tin Can Island terminals.

In addition, he said there was disparity in tariff interpretation, to the extent that the clearance of vehicles which would be impossible at the Terminal is allowed at the other terminals and that there was a disparity in control mechanisms at the two points.

He informed the Committee members that as a result of the uneven and inconsistent application of the new duty regime by the Customs, the Terminal had recorded a huge diversion of traffic to its competing Terminals in Tin Can Island.

Russo lamented that if not checked; it would threaten the successful Private Public Partnership (PPP) between the Federal Government and the investors as well as affect the revenues accruing to the government.

Despite the challenges, he said since inception, the Terminal had handled over 1,000 ships, over one million vehicle units, 500,000 containers and 300,000 general cargo.

Responding, the Chairman of the Committee, Senator Olugbenga Obadara said the Committee would intervene to ensure that the Terminal Operators were given equal opportunity.

PTML is a green field multi-purpose Port Terminal developed by Grimaldi Group in 2005 under a Build, Operate and Transfer (BOT) agreement. It is the biggest RO/RO Multipurpose Terminal in West Africa.

Meanwhile, vehicle importers have continued to groan under the weight of the new tariffs. A car importer who spoke with YNaija under the condition of anonymity said that, “a lot of importers are beginning to diversify into other businesses since they cannot cope”. He also alleged that port officials stopped business yesterday because of the feud with the Customs officials.

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