FG introduces uniform duty rate on vehicles

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THE Federal Government (NCS) has introduced a uniform import duty rate on imported vehicles based on ex-factory price.

This development has taken effect in all Customs commands, a development that now eliminates the indiscriminate imposition of duties. The duty rate before the newly introduced ex-factory rate was between 10-35 per cent depending on the age of the vehicle which limit the customs had pegged at ten years.

The value of vehicles before now were also calculated indiscriminately by customs officers carrying out examination.

In a Memorandum with reference no NCS/T$T/I&E/067S.4/VOL. X, addressed to all Zonal Coordinators, all Area Comptrollers, and all Valuation officers, the government directed that all commands are to comply with the newly introduced ex-factory price for Customs duty collection.

Confirming the development, the Service spokesman, Mr Wale Adeniyi told Vanguard that the idea behind the memo is to ensure that duties on vehicles are uniform in every ports.

“The Memo is to ensure the enthronement of a uniform duty regime on vehicles in all ports, Customs commands, and this is because there has been a variance in the calculation of duty on vehicles,” he stated.

The Memo also contained a progressive reduction of import duty on vehicles of various age – ranging from three months to four years and above.

Vehicles above three months with Odometer reading above 3,000 miles but not above one year will attract a ten per cent duty rate, while vehicles more than one year but not above two years will equally attract a duty rate of 20 per cent.

Vehicles more than two years old, but not above three years will have Customs duty calculated at 30 per cent, and 40 per cent for vehicles more than three years but not more than four years old, while vehicles more than four years old and above will attract a duty rate of 50 per cent.

Part of the Memo reads “Consequent upon directive/approval given, I am directed to forward herewith motor vehicle Ex-factory Price (In United State Dollar) for Customs Duties Collection.

“You are required to take note of allowance for age of vehicles.“The Importers of used Vehicles must produce documentary evidence showing model and cubic capacity vehicles which should be obtained from the vendor.

“You are hereby directed to comply forthwith to avoid indiscriminate collection of duties on motor vehicles. This supercede the earlier one sent”. It would be recalled that Nigeria signed the international convention on agreement of Customs Valuation which is the general agreement on Trade and Tariff.

The convention is the treatment of Customs valuation which is based on the principle of Transaction value, Identical value method, Computed value method or Sale value, Similar value method, and Deductive value method.

The principles of arriving at import duty of vehicles includes the country of manufacture, cubic capacity, age rebate, wear and tear of vehicle percentage duty and ex-factory price.

 

Source http://odili.net/news/source/2009/jul/20/308.html

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