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Customs CG Wants Import Duty on Vehicles Reduced to 45%

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  • Customs CG Wants Import Duty on Vehicles Reduced to 45%

The Nigeria Customs Service is seeking a reduction in the tariff for imported vehicles from the current rate of 70 per cent of the cost of such vehicles to 45 per cent.

The Comptroller-General of Customs, Col Hameed Ali (retd.) said this on Monday in Abuja during a media briefing to mark the 2019 international Customs day.

Ali said that with the high rate of smuggling of vehicles into the country which was caused by the high tariff on imported vehicles, it had become imperative to reduce the tariff to stem the tide.

According to him, any new vehicle imported into the country attracts an import duty of 35 per cent and an additional levy of 35 per cent.

This, he noted, brought the total duty payable on such a vehicle to about 70 per cent.

He described the 70 per cent being charged by the government as high, adding that time had come for it to be reduced to 45 per cent.

To achieve this, he said the government could still retain the 35 per cent import duty, while the additional 35 per cent levy could be tinkered with by bringing it down to ten per cent.

This, he explained, would bring the total import duty on new vehicles to 45 per cent.

He said, “We have 35 per cent duty and 35 per cent levy and so if you import a brand new vehicle into Nigeria, you pay 70 per cent duty.

“From what we have done and based on statistics, we discovered that this duty has now driven most of our importers to our neighbouring ports and also it has increased the rate of smuggling into this country of new vehicles.

“Having interacted with our stakeholders, we discovered from what they said that the sudden increase in duty is what is driving them.

“And since 35 per cent duty cannot be tinkered with, the one that can be tinkered with (is the 35 per cent levy) which is a policy by the Nigerian government. The 35 per cent was put in order to encourage our automotive industry to ensure that it is developed.

He added, “If we reduce the levy, the volume of cars that would be imported into Nigeria will increase and the revenue from the Nigeria Customs Service will increase.

“So we are advising that the government should review the levy and we are asking that it should be reduced to about 10 per cent.

“If you do that, then it will mean that the collective duty on a new vehicle will be about 45 per cent. That is 35 per cent duty and ten per cent levy.

“With that, we will eventually get an increase in the volume of vehicles that are imported, smuggling will be reduced and, therefore, we will realise more revenue and the lives of our people will be saved.”

Speaking on the achievements of the service, he said that since 2015, revenue generation had been on the increase.

He said between 2015 and 2018, the service generated a total of N4.04tn as revenue for the federation.

Giving a breakdown of the revenue collection figure, he said the service generated N904.07bn in 2015.

However, he noted that revenue collection dropped to N898.67bn in 2016 as a result of the foreign exchange restrictions on 41 items by the Central Bank of Nigeria.

In 2017, Ali said revenue collection rose to N1.03tn, adding that in the 2018 fiscal period, the service generated its highest ever revenue figure of N1.2tn.

He said, “Our experiences within these years have shown that with an increased level of compliance from our stakeholders and integrity on the part of all operatives, the nation can earn more revenue needed to build the Nigeria of our dream.”

In the area of seizures, he said that the service seized 32,335 items with duty paid value of N93.38bn between 2015 and 2018.

Giving a breakdown of the figure, he said that 5,485 items with duty paid value of N7.51bn were seized in 2015 while 2016 and 2017 had 5,923 and 4,708 items with duty paid value of N10.14bn and N12.58bn respectively.

In 2018, he said 5,219 items were seized with duty paid value of N62.13bn.

Ali, however, lamented that despite the successes, the service was still facing many challenges.

He gave some of them as porous borders, inadequate non-intrusive equipment, hostile border community dwellers, high level of non-formal trades, low implementation of ECOWAS Protocol on Transit and low level of compliance among international trade actors.

He said while the government was stepping up actions to equip the service, there was the need for stakeholders to support the agency towards a secure, seamless and transparent trade across the country’s borders.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Economy

Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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Economy

N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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