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Succour for Importers as FG Halts Vehicle Import Tax Levy
By Adedapo Adesanya
President Bola Tinubu has ordered the suspension of the Import Tax Adjustment levy on certain vehicles in the country, a move that will provide a breath of fresh air for vehicle importers.
This was one of four executive orders signed into law to curb burdensome taxation policy, according to the Special Adviser, Special Duties, Communication and Strategy, to the President, Mr Dele Alake, on Thursday.
Among the Executive Orders signed into law by the President includes the change in the date of the implementation of the Finance Act, 2023.
The President also deferred the commencement date of the changes contained in the Act from May 23, 2023, to September 1, 2023.
This is to ensure adherence to the 90 days minimum advance notice for tax changes as contained in the 2017 National Tax Policy.
Business Post had recently spoken to some vehicle importers, who worried that the Nigeria Customs Service (NCS) had increased the exchange rate for cargo clearing at the port from N422.30/$ to N589.45/$, as verified on the customs official website.
This newspaper also saw a list of car clearing costs as a result of the rise in the exchange rate. This provided an insight that car importers going forward will be paying more as import duty tariff following the addition of close to 40 per cent.
This will be in addition to other clearing costs, including Value Added Tax (VAT), surcharge, ECOWAS Tax Liberalization Scheme (ETL), terminal charges, shipping charges, and clearing charges to Customs Licensed Agents.
Normally, an importer of the vehicle is meant to pay 20 per cent import duty and 20 per cent levy, amounting to 40 per cent of the total value of the vehicle, but with the jump in the exchange rate, there will be a need for many to adjust their car values.
By our calculations, this meant a car that used to clear for N4.2 million would suddenly jump close to N6 million.
One of the vehicle importers, who requested to be identified simply as Micheal from ID Autos in the Egbeda area of Alimosho Local Government, Lagos, said that the company was aware of the expected hike but had gotten an in-house directive to hold on to clearing their cargoes just yet.
Now, this latest move by the President will provide succour to many already battling a hike in the cost of fuel, electricity tariffs, and other basic amenities.
The spokesperson noted that “You will all recall that prior to the advent of this administration, certain tax changes were introduced via the Customs, Excise Tariff (Variation) Amendment Order, 2023 (henceforth referred to as “the Order”) published on the 8th of May 2023 and the Finance Act, 2023, which was signed into law on the 28th of May 2023.
“Among others, the Order introduced new Excise Duty on Single Use Plastics (SUPs), higher Excise Duties on some locally manufactured products, including alcoholic beverages and tobacco products, and Green Tax by way of Import Tax Adjustment on certain categories of imported vehicles.
“The Tinubu Administration has since noticed that some of the tax policies are being implemented retroactively with their commencement dates, in some instances, pre-dating the official publication of the relevant legal instruments backing the policies. This lacuna has created some challenges of implementation.”
He noted that the reasons behind upward adjustments of some of the taxes were designed to raise revenue as well as address environmental and public health concerns.
However, they have generated some significant challenges for affected businesses and elicited serious complaints amongst key stakeholders and in the business community.
“Let me mention some of the problems we have identified with the aforementioned tax changes. A document known as the 2017 National Tax Policy approved by the Federal Executive Council of the last administration prescribes a minimum of 90 days’ notice from the government to tax-payers entities before any tax changes can take effect.
“This global practice is done with a view to giving taxpayers and businesses reasonable time to adjust to the new tax regime. However, evidencing part of the gaps pointed out earlier, both the Finance Act 2023 and the Customs Excise Tariff Order 2023 did not give the required minimum notice period, thus putting businesses in violation of the new tax regime even before the changes were gazetted,” he added.
Mr Alake also explained that as a result of this, many of the affected businesses are already contending with the rising costs, falling margins and capacity underutilization due to the various macroeconomic headwinds as well as the impact of the Naira redesign policy.
By Adedapo Adesanya
The Lagos State Government has reiterated its commitment to creating an eco-friendly state with fewer cars on the roads in the future.
The Lagos State Commissioner for Transportation, Mr Oluwaseun Osiyemi, said this during a presentation at the closing of the fifth Lagos Real Estate Marketplace Conference and Exhibitions in Lagos.
Mr Osiyemi said that the commitment is in line with the T.H.E.M.E.S Agenda of Mr Babajide Sanwo-Olu’s led administration, expressing concerns that traffic congestion costs the state trillions of Naira in budget deficits annually.
The transportation commissioner noted that the heavy reliance on road transportation, which accounts for 90 per cent of travel in Lagos, is unacceptable and unsustainable.
The Commissioner stated that water and rail transportation account for only two per cent of the means of transportation, highlighting their gross underutilisation.
Mr Osiyemi emphasised that every sector in the state must be robust enough to contribute significantly to the wellbeing of its residents, as Lagos accounts for 30 per cent of the nation’s gross domestic product.
He expressed the state’s readiness to maximise the use of intermodal transportation system, to help upscale socio-economic activities in the metropolis and reduce man-hour loss to traffic.
In a panel discussion, the Special Adviser to Governor Sanwo-Olu on Climate Change and Circular Economy, Ms Titilayo Oshodi, emphasised the need for the state and its stakeholders to adopt a purposeful approach to waste management.
Ms Oshodi highlighted the importance of a circular economy in recycling, repurposing and reusing waste effectively.
She noted that several policies were already in place in the state for managing waste, urging producers and manufacturers across various sectors to collaborate with the state government to contribute to carbon reduction efforts.
Other panellists including Ms Stella Okengwu, Chief Executive Officer of Winhomes, said that the current economic situation calls for housing to be built based on clear demand that aligns with people’s budgets while Mr John Oamen, Co-founder of Cutstruct, urged the state government to promote the digitisation of construction procurement.
This, he added, would enhance the efficiency and practices of the construction and real estate sectors.
By Modupe Gbadeyanka
There are plans by Heirs Insurance to introduce insurance products tailored for vehicle owners, a statement from the underwriting firm has disclosed.
According to the subsidiary of Heirs Holdings, this low-cost motor insurance package known as the Flexi Comprehensive Motor Insurance Plan will provide the benefit of a comprehensive motor insurance plan for a fraction of the cost, addressing the financial realities many Nigerians face.
The underwriting company announced the plan to introduce this package as it launched a new campaign designed to reward its customers.
This initiative themed Unwrapping Smiles will bring hope to individuals, families, and communities this holiday season, and will run from December 10 to December 31, 2024.
It will feature community-focused outreaches, including Christmas gifts and exciting rewards to put smiles on the faces of Nigerians. It will also include the launch of a holiday-watch web film known as The Underwriters for all Nigerians to enjoy.
“At Heirs Insurance Group, we are committed to providing much more than insurance. In a season when many Nigerians seek hope and reasons to smile, we are proud to offer initiatives that inspire and uplift,” the Chief Marketing Officer of Heirs Insurance, Ms Ifesinachi Okpagu, said.
By Adedapo Adesanya
Nigeria’s Presidential Compressed Natural Gas Initiative (PCNGi) claims that investments in championing the CNG value chain have hit $450 million.
This was disclosed by Mr Michael Oluwagbemi, Project Director and Chief Executive Officer (CEO), PCNGi, during the 9th Edition of the Nigeria Energy Forum (NEF2024) Day 2, Virtual Event themed Energising Sustainable Industrialisation.
According to the PCNGi CEO, the amount goes into things like mother stations, daughter stations and refuelling stations as well as conversion centres which are starting to spring up across the nation.
Mr Oluwagbemi, represented by Mr Tosin Coker, the Head of Commercial, PCNGi, said the initiative had successfully converted more than 10,000 vehicles from petrol to CNG.
“By 2027, the initiative will have converted more than one million vehicles using petrol to CNG,” he said.
On incidents of explosion of vehicles using CNG, the CEO assured Nigerians that it had taken precautionary measures with different agencies of government to ensure safety.
Mrs Ibironke Olubamise, National Coordinator of the GEF Small Grants Programme (SGP), managed by UNDP, said the SGP was investing in youth energy innovation for economic growth and environmental sustainability.
Mr Daniel Adeuyi, NEF Group Chairman, said, “The event featured three super sessions on Energising Industrial Revolution, Community Climate Action by GEF-SGP UNDP and Clean Energy Innovations.
“The sessions are to share lessons learnt from real-life projects and build capacity of young entrepreneurs and cross-industry professionals.”
Mr Joseph Osanipin, the Director General of the National Automotive Design and Development Council (NADDC), said that the council had trained more than 4,000 auto technicians on how to convert petrol vehicles to CNG.
He said the council had started campaigns to sensitise Nigerians on the advantages of using CNG to power their vehicles.
“CNG can guarantee a cleaner environment, it is cheaper and affordable,” he said.
Mr Oluwatobi Ajayi, the Chairman and Managing Director of Nord Automobile Ltd., said the company was established to tackle the growing demand for vehicles in Africa and reduce import dependency.
He said that because of the Federal Government’s CNG initiative, the company had incorporated it into their vehicle production to meet up with the government policy.
Mr Armstrong Tankan, the Managing Director and Chief Executive Officer, Ministry of Finance Incorporated (MOFI), said that MOFI was set up in 1959 as the statutory vehicle to hold all the assets owned by the federal government.
“Today, we’ve been able to identify the assets the federal government owns and we are trying to track them.
‘We actually do have assets, not just locally but globally as well and we must establish visibility over what the federal government owns before we can start talking about managing them.
“So, we want to try to minimise the waste, minimise the overlaps and help to improve output,” he said.
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