The imposition of 15 PERCENT Common External Tariff (CET) levy by the Nigeria Customs Service on motor vehicles is illegal, the National President of the National Council of Managing Directors of Customs Agents (NCMDCA), Mr Lucky Amiwero has said.
In a letter to President Muhammadu Buhari for his intervention, Amiwero said the motor levy was in contravention of the Finance Act of 2020 and other domestic laws on duties and levies.
He said that the imposition of the levy has forced many importers and their customs agents to abandon their vehicles in the ports,
The implication of importers abandoning their goods at the ports would mean more demurrage and other charges that were injurious to the national economy.
Part of the letter reads, “We wish to bring to the attention of the Federal government on the imposition of common External Tariff(CET) levy of 15% on Motor vehicles that is not backed by any law or approved in the Finance Act of 2020 and 2021 and not provided in any law of the land and assessed on Motor Vehicles by Nigeria Customs Service(NCS)
“There is no such thing as Common External Tariff (CET) levy of 15% either on Motor vehicles or goods, the only approval is on ECOWAS trade liberalization levy (ETLS) of 0.5% , the introduction of CET LEVY is strange to our domestic law and the ECOWAS convention on Import duties and levies assessment and collection.
“The Levy approved in the Finance Act 2020 approved foe Motor Vehicles specifically state as follows:
“Amendment of the first Schedule to the Act is amended by inserting and replacing as the case may be the following duties and levies:
(a)Duty on Tractors(Heading 8701) From 35% to 5%
(b)Duty on Motor Vehicles for the Transportation of more than ten persons (HS Heading 8702) From 35% to 10%
(c) Levy on motor Vehicles for transportation of persons(Cars) (HS Headings 8703) from 35% to 5% and
(d) Duty for Motor vehicles for transportation of Goods (HS Heading 8704) From 35% to 10%.
“The Finance Act provides for 5% levy for Motor vehicles of Chapter 8703 that is cars , there is no provision for COMMON EXTERNAL TARIFF (CET) levy of 15% in either 2020 and 2021 Finance Act passed by the National Assembly and signed in to law which is the only approval by the National assembly on Motor vehicles”, Amiwero writes.
“The shifting from National Automotive Council(NAC) levy of 15 % to Common External Tariff CET levy of 15%, by the Nigeria Customs Service(NCS) contravenes the principle of World Customs Organization WCO, kyoto convention on the simplification and harmonization of Customs procedure , the World Trade Organization under the Agreement on Trade facilitation Agreement( ATF) which core principle is predictability, consistency and transparency on Trade information, fees and charges Imposed on in connection with importation and exportation, which create confusion and impediments”.
“As a result of the confusion of the shift from NAC levy of 15% to CET levy of 15% without any backed legislation, many vehicles are now abandoned at the port, accumulating demurrage and rents, which creates serious bottleneck to revenue collection and impediment to trade, especially when is not covered under any domestic law, the only approval for Levy for Motor vehicles of 8703 Cars is five(5) % by the National Assembly and signed in to law by the president
“We hereby wish the Federal Government to quickly save the trading community by intervention , so that the proper thing will be done and the port goes back to normalcy”.