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35% Levy On Imported Cars To Kickoff This April

35% Levy On Imported Cars To Kickoff This April

The 35 per cent levy on imported used vehicles (aka Tokunbo) will begin on April 30, the Nigerian Automotive Council (NAC) has said:

In a statement, the council said: “The automotive policy has five elements, one of which is market development. Under market development, tariffs are increased on Fully Built Unit (FBU) vehicle imports. These tariffs are to be reduced gradually over the years, as the vehicle assembly and local content operations gain momentum.

“The Nigerian vehicle market is approximately 400,000 vehicles annually, with about 300,000 imported as used. Hence the government has to balance vehicle supply and affordability with the production by the assembly plants.

“ The following are the measures in the policy to ensure vehicle supply and affordability, Complete Knocked Down (CKD) and SKD tariffs are 0%, 5% and 10% respectively.

“Assembly plants to assemble affordable vehicles. Assembly plants will import two FBU at concessionary duty for every one CKD/SKD they assemble in 2014/15. It will be one to one in 2016/17.

“New investors will also be able import FBU at concessionary duty in numbers to fill the gap between the supply by the assembly plants and demand.(v) Affordable vehicle financing scheme to be set up to enable new vehicles purchase by Nigerians.

“The government earlier deferred the imposition of the levy on used cars to December 31st 2014 to enable assembly plants ramp up enough production to satisfy demand.

“As you know, VON is assembling Hyundai and Nissan cars, PAN is assembling Peugeot cars, IVM has started assembling cars, and Dana Motors is assembling Kia cars. VW, Honda and Renault, among others, are expected to start assembly operations next year. VON, IVM and Kia also have cars costing N1.5m-N2.0m. So the industry can produce the vehicles we need in 2015.”

The statement added that arrangements for the establishment of the affordable vehicle finance scheme suffered delay of about four months due to the Ebola Virus Disease.

“The staff of the collaborating bank, Wesbank of South Africa, delayed their planned trip to Nigeria to set up operations from September 2014 to January 2015. Hence, the new date for the start of operations of the financing scheme is April 2014. Accordingly, the CME/HMF has been asked to extend the levy deferment on used cars to 30 April 2015.

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