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Imported Vehicles: Customs Slam 15% Levy, Clearing Agents Plan strike

Published

2 years ago

April 12, 2022

Clearing agents operating in the nation’s maritime sector may withdraw their services following the reintroduction of a 15 per cent National Automotive Council levy on imported used vehicles by the Nigeria Customs Service.

NAC had in 2011 proposed 35 per cent duty differentials between imported fully-built units and locally assembled cars. The proposal reportedly failed later.

But years after the introduction of the levy, the Nigeria Customs Service on Saturday reintroduced 15 per cent NAC levy on used imported vehicles.

Speaking on the development, the Chairman of the National Council of Managing Directors of Licensed Customs Agents, Ports & Terminal Multipurpose Limited chapter, Abayomi Duyile, said the move could have an adverse effect on the sector.

He said, “As I speak to you now, the NCS has reintroduced the NAC levy, which is a 15 per cent payment on used imported vehicles. That is a major issue; it means an additional 15 per cent on the duty we are paying currently”

Duyile said he was surprised the service was coming up with the levy in the second quarter of this year.

“We will meet tomorrow and when we do, we will make our views known to the government. What we have in Nigeria are assembly plants, it is not as if we produce any vehicles completely in Nigeria. I am surprised now that towards the second quarter of 2022, the Customs is coming back again with the NAC levy.

“Why should the NAC levy be on used vehicles? I don’t know why they are coming up with the NAC levy again now. The Customs didn’t inform us, so we have been advised to stop the process of duty payment until this is sorted out. This is everywhere for now and anywhere you are clearing used vehicles, you will face the same problem.”

Also speaking, the Chairman of the National Association of Government Approved Freight Forwarders, PTML Chapter, George Okafor, said the outcome of the association’s meeting with its members will determine whether the agents would embark on the proposed strike or not.

“This is wrong because there is no way Customs can calculate NAC levy on used vehicles. It should be for new vehicles. The levy is for new vehicles, and not old or used vehicles. We will have to meet with the Customs command to determine the next line of action.”

Meanwhile, the National Public Relations Officer of Customs, Timi Bomodi, said the move was in line with the Economic Community of West African States Common external tariff, 2017-2021.

Bomodi said in a statement that the service in April migrated from the old version of the ECOWAS CAT to the new version, adding that this was in line with the World Customs Organisation’s five-year review of its nomenclature.

“On Friday, April 1, 2022, the Nigeria Customs Service migrated from the old version of the ECOWAS Common External Tariff (2017- 2021) to the new version (2022- 2026). This is in line with WCO’s five years’ review of the nomenclature. The contracting parties are expected to adopt the review based on regional considerations and national economic policy.

“The nation has adopted all tariff lines with few adjustments in the extant CET. As allowed for in Annex II of the 2022-2026 CET edition, and in line with the Finance Act and the National Automotive Policy, NCS has retained a duty rate of 20 per cent for used vehicles as was transmitted by ECOWAS with a NAC levy of 15 per cent. New vehicles will also pay a duty of 20 per cent with a NAC levy of 20 per cent as directed in the Federal Ministry of Finance letter ref. no. HMF BNP/NCS/CET/4/2022 of 7th April 2022”

He added that the decision took immediate effect.

“In Chapter 98 of the current CET – bonafide assemblers importing Completely Knocked Down and Semi Knocked Down are to enjoy a concession of zero per cent and 10 per cent duty rate, respectively. While within ECOWAS, duty rates for the same items are five per cent and 10 per cent, respectively. Incentivising their efforts through policy interventions guarantees a win-win situation for the nation in the long run. Implementing the current CET takes immediate effect, please,” the statement added.

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Business

CBN Sells Fresh Dollars To BDCs At N1,021/$

Published

5 days ago

April 23, 2024

Editor

The Central Bank of Nigeria (CBN) started fresh and direct sales of US dollars at N1,021 per dollar to Bureau De Change operators.

Nigeria’s apex bank disclosed this in a circular signed by its Director of Trade and Exchange Department Hassan Mahmud.

“We write to inform you of the sale of $10,000 by the Central Bank of Nigeria (CBN) to BDCs at the rate of N1,021/$1. The BDCs are in turn to sell to eligible end users at a spread of NOT MORE THAN 1.5 percent above the purchase price,” the circular posted on its website read.

“ALL eligible BDCs are therefore directed to commence payment of the Naira deposit to the underlisted CBN Naira Deposit Account Numbers from today, Monday, April 22, 2024, and submit confirmation of payment, with other necessary documentations, for disbursement of FX at the respective CBN Branches.”

CBN’s move is coming as the naira is recording a slight depreciation against the dollar after weeks of gains.

In late March, the bank also sold $10,000 to each of the eligible Bureau De Change (BDC) operators in the country at the rate of N1,251/$1.

Like in the most recent sales, it warned BDCs against breaching terms of the dollar sales, vowing to sanction defaulters “including outright suspension from further participation in the sale”.

The fortunes of the naira have fallen sharply since President Bola Tinubu took over in May. Inflation figures have reached new highs and the cost of living hitting the rooftops.

Nigeria’s currency slid to about N1,900/$ some months ago at the parallel market. But in recent weeks, it has gained against the dollar.

The Nigerian authorities have also doubled down on their crackdown against cryptocurrency platform Binance and illegal BDCs.

On March 1, the CBN revoked the licences of 4,173 BDCs over compliance failures.

Business

JUST IN: FirstBank Gets New MD/CEO

Published

7 days ago

April 22, 2024

Editor

Olusegun Alebiosu has been appointed as the Acting Managing Director/Chief Executive Officer of First Bank of Nigeria Limited (FirstBank Group), effective April 2024.

Alebiosu steps into this pivotal role from his previous position as the Executive Director, Chief Risk Officer, and Executive Compliance Officer, a position he held since January 2022.

Alebiosu brings to the helm of FirstBank over 28 years of extensive experience in the banking and financial services industry. His expertise spans various domains including credit risk management, financial planning and control, corporate and commercial banking, agriculture financing, oil and gas, transportation, and project financing.

Having embarked on his professional journey in 1991 with Oceanic Bank Plc. (now EcoBank Plc.), Alebiosu has held several notable positions in esteemed financial institutions.

Prior to joining FirstBank in 2016, he served as Chief Risk Officer at Coronation Merchant Bank Limited, Chief Credit Risk Officer at the African Development Bank Group, and Group Head of Credit Policy & Deputy Chief Credit Risk Officer at United Bank for Africa Plc.

Alebiosu’s academic credentials further enrich his professional profile. He is an alumnus of the Harvard School of Government and holds a Bachelor’s degree in Industrial Relations and Personnel Management. Additionally, he obtained a Master’s degree in International Law and Diplomacy from the University of Lagos, as well as a Master’s degree in Development Studies from the London School of Economics and Political Science.

A distinguished member of various professional bodies, including the Institute of Chartered Accountants (FCA), Nigeria Institute of Management (ANIM), and Chartered Institute of Bankers of Nigeria (CIBN), Alebiosu is renowned for his commitment to excellence and ethical practices in the banking sector.

Beyond his professional endeavors, Alebiosu is known for his passion for golf and adventure. He is happily married and a proud parent.

With Alebiosu’s appointment, FirstBank of Nigeria Limited anticipates continued growth and innovation under his leadership, reinforcing its position as a leading financial institution in Nigeria and beyond.

Business

CBN Gives New Directive On Lending In Real Estate

Published

2 weeks ago

April 17, 2024

Editor

The Central Bank of Nigeria, CBN, has released a new regulatory directive to enhance lending to the real sector of the Nigerian economy.

The directive, issued on April 17, 2024, with reference number BSD/DIR/PUB/LAB/017/005 and signed by the Acting Director of Banking Supervision, Adetona Adedeji, signifies a notable shift in the bank’s policy towards a more contractionary approach.

In line with the new measures, the CBN has reduced the loan-to-deposit ratio by 15 percentage points, down to 50 per cent.

This move aligns with the CBN’s current monetary tightening policies and reflects the increase in the Cash Reserve ratio rate for banks.

The LDR is a metric used to evaluate a bank’s liquidity by comparing its total loans to its total deposits over the same period, expressed as a percentage.

An excessively high ratio may indicate insufficient liquidity to meet unexpected fund requirements.

All Deposit Money Banks are now mandated to adhere to this revised LDR.

The CBN has stated that average daily figures will be utilised to gauge compliance with this directive.

Furthermore, while DMBs are encouraged to maintain robust risk management practices in their lending activities, the CBN has committed to continuous monitoring of adherence and will adjust the LDR as necessary based on market developments.

Adedeji has called on all banks to acknowledge these modifications and adjust their operations accordingly. He emphasised that this regulatory adjustment is anticipated to significantly influence the banking sector and the wider Nigerian economy.

The circular read in part, “Following a shift in the Bank’s policy stance towards a more contractionary approach, it is crucial to revise the loan-to-deposit ratio policy to conform with the CBN’s ongoing monetary tightening.

“Consequently, the CBN has decided to decrease the LDR by 15 percentage points to 50 per cent, proportionate to the rise in the CRR rate for banks.

“All DMBs must maintain this level, and it is advised that average daily figures will still be applied for compliance assessment.

“While DMBs are urged to sustain strong risk management practices concerning their lending operations, the CBN will persist in monitoring compliance, reviewing market developments, and making necessary adjustments to the LDR. Please be guided accordingly.”