Exchange Rate Floating Pushed up Vehicle Import Duties by 50%, Customs Agents Reveal

The Association of Nigerian Licensed Customs Agents (ANLCA) yesterday disclosed that exchange rate floating had stoked 50% increase in import duties on vehicles imported into the federation.

ANLCA, Nigeria’s oldest and biggest body of clearing and forwarding practitioners, said vehicles imported into the country were trapped at the ports due to the rise in exchange rate, which skyrocketed vehicle duties.

This was revealed in separate interviews ANLCA Taskforce Chairman, Alhaji Rilwan Amuni and Secretary, TinCan ANLCA, Mr Michael Imonitie granted News Agency of Nigeria (NAN) yesterday.

In his interview, Amuni said the floating of the nation’s currency had caused a drop in vehicle importation in the nation’s ports.

According to him, the challenges faced by customs agents at the ports were enormous because of the high dollar rate, which hiked duties on vehicles to over 50 per cent.

“The job we used to do after the advent of the Vehicle Identification Number (VIN) in which we charged N1.4 million, is now like N2.2 million and this has resulted in vehicles being trapped in the ports.

“Also, there has been a drop in importation because things are really biting hard,” he said.

The agents also said vehicles imported into the country were trapped at the ports due to the rise in exchange rate, which skyrocketed vehicle duties.

Amuni said the floating of the naira was inevitable because the government wanted a uniform rate.

Amuni, however, urged the government to look into other levies paid at the ports, saying the development had affected goods already imported, noting that they had no choice but to clear at the current rate.

He also urged the government to look into the levy placed on used goods, adding that they are proposing a dialogue with the Federal Government on ways to jettison this levy so that there would be relief.

“Some people are confusing the tax that was suspended recently with the issue of levy. It is not the levy that they removed, it’s the Import Adjustment Tax that was supposed to have started.

“We are appealing to the government to remove the levy because what does a poor man derive when he buys a Corolla 2004 and pays duty and fine again? The only goods that are supposed to have levy are luxury goods.

“Maybe you are a big man and you want to ride a yacht or helicopter, that is what they are supposed to levy not on used goods,” he said.

In his own interview, Imonitie disclosed goods were not being cleared at the port due to the challenge, saying out of 100 importers, only 20 were taking their goods out of the ports.

According to him, this means that most goods will be incurring demurrage and overtime or even abandoned.

“We all know that there is going to be a negative effect on the clearance of vehicles at the port.

“Since the government announced a uniform exchange rate, the exchange rate has risen from N422.3 to N589.55 and now N770.88 which is a pure black market rate.

“The exchange rate of CBN is N756/N757, government was supposed to have given us a notice of either 60 or 90 days before implementation.

“This is because a lot of importers have opened their Form M at the old exchange rate. I have not seen any importers that have done any new importation. Most of the goods in the port are old stock.

“This means that the end cost of goods will be high. If I am being forced to pay the exchange rate twice of what I have paid before it means that the end users will be the ones to suffer it,” he said.

He said that the burden was on importers and being felt by the clearing agents, and the customs brokers, due to the jobs they do, and most of their clients do not have the difference to pay for the exchange rate.

“Some goods have been lying down in the port, some agents are going the extra mile to borrow money from individuals because banks have not opened the window for soft loans.

“The hardship is almost 85 per cent of what the government has imposed on us.

“The importers are sourcing the money for clearing agents because they are the ones that pay the bill, they pay terminal operators and shipping lines, and we only take our commission.

“Now, the importers are complaining and we want them to channel their complaints through the Manufacturers Association of Nigeria and the Chartered Institute of Commerce of Nigeria because their voices need to be heard,” he said.