Clearing agents in Nigeria are contemplating a strike action following the reintroduction of a 15% National Automotive Council levy on used imported automobiles by Nigeria Customs Service, NCS. 

Current situation 
Barely 14days after clearing agents protested against the introduction of Vehicle Identification Number, they were hit with an additional 15% levy to the duty (20% Customs duty and 10% levy) being paid to Nigeria Customs Service. 

Brief background to the story 
The federal government in the finance Act 2020 reduced the import levy on cars from 30% to 5%, and the levy on tractors from 35% to 5%. FG also reduced import duty on mass transit vehicles with passenger capacity of 10 persons from 35% to 10%. This action didn’t sit well with stakeholders of the industry, as the federal government was forfeiting a significant amount of the revenue generated from import duties.

What they are saying 
The Chairman of the National Council of Managing Directors of Licensed Customs Agents, Ports & Terminal Multipurpose Limited chapter, Abayomi Duyile, lamented on the additional cost, stating that they usually impose the National Automotive Council levy on newly imported cars. He added that they would meet with government officials to stop the incursion of further levies. 

  • The Chairman of the National Association of Government Approved Freight Forwarders, PTML Chapter, George Okafor, speaking on the development said that the association’s meeting with the federal government would decide if there would be a strike action or not.

This means that
When the customary 7.5% Value Added Tax is included in the total amount remitted to the government, seaport clearing agents would be paying over 50% of the value of imported cars. 

On the other hand
The prices of importing cars into Nigeria would increase significantly if NCS 15% levy stands as clearing agents would increase their prices to accommodate the new duty.

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