The Federal Government
has released the details of
new duties and levies
payable on imported new
and used cars as well as
imported new tyres from
next year, raising the tariff
from 20 per cent to 70 per
cent. Already, dealers of
imported vehicles has
estimated that the new
rate would translate into
an increase of 60 per cent
on imported cars.
In other words, prices
of imported cars
currently being sold
between N3m and
N5m will shoot up to
N4.8m and N8m;
while tokunbo
vehicles selling for
N800,000 will rise to
N1.28m.
The Federal Executive
Council had last month
approved a new national
automotive policy to
encourage local
production and
assembling of new
vehicles with an
imposition of a high
import tariff on fully built
vehicles.
A two-page document
dated November 14 and
signed by Minister of
Finance, Dr. Ngozi
Okonjo-Iweala, gave the
new import tariff on cars
as 70 per cent (of the
cost of each vehicle).
It stated that a fully built
car would attract a duty
of 35 percent and another
35 percent of the cost of
the car as a levy.
Hitherto, importers/
dealers parted with 20 per
cent and two per cent as
duty and levy, respectively
on new cars. Ten per cent
flat rate was also
imposed on commercial
vehicles.
Although the new tariff on
cars shows an increase of
48 per cent over the old
rate, dealers have
estimated that the
showroom price of an
imported car will rise by
60 per cent when other
variables (costs) are
added.
A sales manager with one
of the major dealers told
Punch that: “Many of us
are skeptical about
ordering for new vehicles
because we don’t know if
people would be ready to
pay the about 60 per cent
increase on the cars when
the import duty and levy
are added to the original
cost of purchase. Even
the supplies by local
plants will obviously be
grossly inadequate to
meet the demand.”
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