News  |  Nigeria  |  National  

Nigeria not losing revenue under auto policy, says official

By NAN   |   06 November 2015   |   4:01 pm  

An official of the National Automotive Design and Development Council (NADDC), Mr Luqman Mamudu, says the country is not losing revenue under the automotive policy contrary to speculations in some quarters.

He told the News Agency of Nigeria (NAN) in Abuja on Friday, that the speculations were the handiwork of those still opposed to the policy for their selfish interests.

Mamudu, who is the council’s Director of Policy and Planning, said that the policy would boost government revenue, especially with the recent hike in vehicle import tariff.

“Before the NAIDP, the duty on vehicles below 3000 cc was 20 per cent and most vehicles imported into the country fall under this category.

“In the past, only cars above 2000 cc attracted 35 per cent. But with the policy, the duty on all cars is now 35 per cent.

“Commercial vehicles attracted 10 per cent before the policy, but now, all fully built commercial vehicles attract 35 per cent.

“The so called concessionary import granted assemblers is 20 per cent for commercial vehicles and 35 per cent for cars. So, where is the loss of revenue?’’

The director argued that even the duty on semi-knocked-down (SKD) kits imported by assemblers for commercial vehicles were in some cases as high as 10 per cent.

According to him, only completely-knocked-down (CKD) kits with very high employment potential along with equipment imported to build vehicles attract zero per cent.

Mamudu said that the concessions granted to assemblers under the policy were carefully selected to make the industry fairly attractive to local and foreign investors.

“This is a point that the NADDC has tried to explain to other stakeholders, including the Nigeria Customs Service, especially some individuals in its past management.

“The concessions granted to assemblers were carefully selected to ensure that local and foreign investors find it fairly convenient to invest in a very capital intensive industry.

“This is without loss of revenue to government or excessive increase in prices of products coming out of the assembly plants.’’

He explained further that vehicle assembly at SKD level was a global provision to allow easy entry into the industry by investors.

As investors’ confidence grow in the market, according to him, they then graduate to the labour intensive operations at CKD level.

“Basic as SKD operations seem, they represent almost 18 per cent value added for cars and about 60 per cent for commercial vehicles, especially when you have to build bodies locally,’’ he added.



You may also like