The Automotive and Locomotive Engineers’ Institute (AutoEI), a division of the Nigerian Society of Engineers (NSE) on Wednesday warned that implementing the five per cent tariff on imported vehicles recently approved in the 2020 Finance Act will trigger massive job losses.
They urged the federal government to rescind the decision and expunge Section 38 of the Finance Act 2020 which reduces the tariff from 35 to five per cent in its entirety and revert to status quo ante.
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The institute stated this at the end of its February general meeting hosted by its Kaduna chapter at the Nigerian Society of Engineers (NSE), Kaduna branch.
The institute’s position was contained in a communique issued after the meeting and signed by the national chairman, Dr. Abubakar Jumare and Kaduna Branch chairman, Engr. Mobolaji Olajide.
Daily Trust reports that the federal government, in the Finance Act 2020 recently assented to by President Muhammadu Buhari, slashed the levy on imported cars from 35 per cent to five per cent.
Automotive manufacturers had called for the reversal of the policy which they said threatened over N264bn investment in auto assemblies and partnerships with original equipment manufacturers (OEMs).
Adding its voice on Wednesday, the automotive engineers said the Finance Act portended job losses to her members and many stakeholders who have given effect to the Nigerian Automotive Industry Development Plan [NAIDP] by attracting more OEM investments to the country with consequential socio-economic benefits including direct and indirect job creation.
The communique added, “The inaccurate presentation of the previous tariff situations in section 38 of the official gazette no. 4 vol. 108 on the Finance Act 2020 is laden with ambiguities indicative of its hurried inclusion in the document and obvious absence of consultation with stakeholders who have made huge investments in the industry on the basis of the fiscal policy measures for the automotive industry expressed in the Federal Ministry of Finance’s letter ref. no. BD/FP/DO/09/I/189, dated 14th November 2013.
“It is expected that the Federal Government’s commitment to ease of doing business, promotes industrial investment poised to improve national technological acumen and socio-economic livelihoods of the people through the very vast automotive value chain rather than satisfying selfish aspiration of briefcase traders at this crucial time characterized by increasing competition resulting from addition of the African Continental Free Trade Agreement [AfCFTA] to existent ECOWAS trade protocol.”
The institute also implored the Federal Government through all relevant Ministry, Departments and Agencies [MDAS] to present the NAIDP as an executive bill to the National Assembly for its speedy passage into law to set the nation on the right footing for rapid industrial revolution and consequential socio-economic transformation.
