car dealers allege customs operating two duty regimes

The Nigerian Automobile Association has alleged that there are two different regimes of duties being collected from them by the Nigeria Customs Service, a situation it says is against the rules of the World Trade Organisation.

The group, in a statement on Wednesday signed by its Secretary, Ademola Moshood, said this was discovered during one of the meetings between car dealers and the Customs held to address the allegations of smuggling levelled against them.

It said the two regimes of duties and the system of documentation were allowing corruption to thrive as well as causing distress to buyers of new vehicles in the country.

The association recalled that on September 29 this year, members of the Comptroller-General of the Customs’ strike force and officers attached to the Federal Operations Unit, Zone ‘A’, Ikeja, Lagos stormed the Berger auto market and other major car dealers’ premises in Lagos in search of smuggled vehicles and sealed the auto marts.

It said this led to an engagement between some Customs officials and car dealers in the state.

“Subsequent meetings with the dealerships revealed that the government’s agency had a system of documentation and two regimes of duties that create a fertile environment for corruption to thrive within its fold to the distress of buyers of new vehicles in the country,” it said.

“The Customs duty system is whimsical because it is not based on any known indices and certainly not based on the World Trade Organisation’s, which applies only duties determined as Freight on Board.”

The group stated that the price of a product sold by a manufacturer to a Nigerian buyer or any other country’s importer, also called FOB, was universal to every buyer of goods from the same manufacturer and could be used to calculate local duties in the destination country.

It said if the quoted cost of the FOB was different, it must have been on account of accessories in the vehicles.

It said dealers who met with Customs officials after the September 29 shutdown were shocked to find that there were two sets of FOB in two different documents.

It explained that one of the documents, entitled ‘National Valuation Database for Imported Motor Vehicles 2014-2019’ was believed to be baseless, as the dealers claimed it was contrived based on the whim and caprice of the NCS.