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•Transporters can’t replenish fleet …Dealers offer solution
From Uche Usim, Abuja
Prices of foreign pre-owned vehicles, popularly called (Tokunbo) have doubled or tripled (in some jurisdictions), worsening commuters’ nightmares and stifling the economy.
The troubling development, vehicle dealers note, stems from naira’s rapid depreciation amid volatilities in the foreign exchange market.
Other causes are high duties, levies, taxes, the Vehicle Identification Number (VIN) valuation policy of the Nigeria Customs Service (NCS), rising poverty and weakened purchasing power of consumers.
The development has hampered transporters efforts to replenish their fleet, forcing them to deploy old and worn out vehicles on the roads which break down frequently or crash in accidents.
Checks by Daily Sun showed that a Golf 3 sedan used for intra-city and inter-city services that hitherto sold for between N900,000-1.2 million before the naira crash and subsidy removal, now goes for N2.7 million on the average.
The same increase was seen in a Toyota Sienna. It jumped from N6 million to about N10 million.
A 2012 Honda Accord now costs between N8-N10 million from the N6.5 it was last year and earlier this year.
The President, Association of Motor Dealers of Nigeria (AMDON), Prince Ajibola Adedoyin, told Daily Sun that the country will soon grind to a halt if efforts were not made to make vehicle importation cheaper and more seamless.
According to him, the astronomical rise in the cost of vehicle importation and the VIN valuation policy of Customs leave dealers and Nigerians in general with the shorter end of the stick.
He called on Customs to yank off the 10-year age ceiling on imported pre-owned vehicles but concentrate on ensuring only sound vehicles, without strict consideration of the age.
“You know that a 17-year old vehicle may be healthier than a 10-year old that has turned to scrap. Age is not particularly a measurement of healthier vehicles. It’s maintenance. So, the government should allow older but healthier vehicles into our shores to save this economy.
“I can’t buy a vehicle for $700 for instance but pay an equivalent of $1,800 as the duty alone. Other levies and taxes aren’t yet imputed. When you add all those and your little profit margin, you can then ask; who will buy such?
“How many Nigerians will afford it with the weak purchasing power crisis. That is the reason that many Nigerians, including transporters, are riding rickety vehicles and endangering the lives of commuters…”
“We are not yet opportune to meet the new CGC. We have loads of issues to discuss with him”, he said.
Adedoyin asked the federal government to drop levies on imported vehicles to between 5 and 10%, instead of the current 35%.
He called on President Bola Ahmed Tinubu to immediately reopen the land borders to make room for vehicles to come from there, rather then forcing importers to route their containers to Lagos, which impacts heavily on imports cost and prices of the vehicles.
Meanwhile, the Customs management, having observed steady decline in revenue generation via imported pre-owned vehicles through Nigerian ports, has directed its officers to dump the VIN valuation policy and revert to the manual method of obtaining value on used vehicles.
A circular to that effect marked; NCS/T&T/2023/014, signed by the Assistant Comptroller General, Tariff and Trade, C.K Niagwan and dated August 24, 2023, read in part; “It has been observed with great concern that examination and valuation officers are not complying with the procedure for examination, valuation and release of used vehicles.
“For the avoidance of doubt, all used vehicles after examination are to be referred to the Valuation seat to verify the trim of the imported vehicle and assign the appropriate value, instead of applying the base value.
“Pursuant to the above, you are requested to reorient all examination and valuation Officers of this procedure to prevent further loss of revenue”.
In February 2022, Customs introduced the VIN valuation used to electronically determine the import value of all used and new vehicles shipped into Nigeria.
The valuation policy not only gave uniform tariffs to the same model of cars but also raised the amount importers and their agents pay as import duties to the government.
VIN policy also sparked controversies as freight forwarders insisted that it increased the import duties of vehicles and minivans by 300 percent.
The federal government on its part said the policy sought to give it the real value in revenue from imported vehicles and not the one generated at the discretion of Customs valuation officers.
The policy was also expected to weed out old vehicles of more than a decade old to spare the country the horror of becoming the graveyard for old and worn out vehicles.
On the flipside, it has swelled the price of imported vehicles in a nation where over 155 million are shackled by multidimensional poverty.
