The federal government has been dragged before a Federal High Court sitting in Abuja, to challenge the Section 38 of the Finance Act 2020 which gives legal basis to the implementation of the 5% levy on some categories of cars which is reduction from 35% implemented by the government.
President Muhammadu Buhari had assented to the Finance Act 2020 on 31st December, 2020.
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Following the Presidential assent, the Nigeria Customs Service had planned the implementation of the policy.
PAN Nigeria Limited and other key players in the auto industry had in January at a press expressed concerns about the review saying “it is a policy summersault capable of killing Nigeria’s automobile industry.”
Still dissatisfied with the Policy, Pan Nigeria Limited, Lafbart Innovation and Consulting Limited, Mikano International Limited and the Incorporated Trustees Of Global Integrity Crusade Network (GICN) have dragged the government to court to challenge the policy.
Defendants in the suit are the National Assembly, the federal government, ministry of industry trade and investment, ministry of finance and the Nigeria Custom Service.
They argued that the Finance Act 2020 reduced tariff on the importation of Fully Built Vehicle (FBU) from 35% to 5% whereas import duty for Semi Knocked Down (SKD) remains at 10%.
They stated that the implication of the policy “is that all the businessmen who have invested in the assembly of SKD commercial vehicles including tankers for which Nigeria has a history of competence beyond the New Automotive Industry Development Plan (NAIDP) will suffer.”
“Dealers in FBU can now import freely without recourse to Nigerian assemblers including body builders that have existed for generations.”
In a suit marked FHC/ABJ/CS/157/2021 and filed on 10th February, 2021 the plaintiffs, through their counsel, Barrister Ayodele Akisanya and Adamson Adeboro Esq., of Curtis Partners, want the court to determine the following questions:
“Whether by the provisions of Section 13(1) of the Customs and Excise Tariff ETC (Consolidated) Act, the failure of the President to rely on the recommendation of the Tariff Review Board to modify duties and levies as mandated by the said Section 13(1) before transmitting the Finance Bill 2020 as an Executive Bill to the 1st Defendant for passage into law and which Finance Bill 2020 includes Section 38 whereat the President purports to modify duties and levies, did not incurably contaminate the said Section 38 of the Finance Bill 2020 now Section 38 of the Finance Act 2020 and render same null and void ab initio and liable to be struck down.
“Whether by the provisions of Order 77(3) of the Senate Standing Order as Amended 2015 the 1st Defendant ought not to have received and if not provided by the Executive, demanded information or evidence of compliance with the statutory condition precedent set in Section 13(1) of the Customs and Excise Tariff ETC (Consolidated) Act as a precondition for passing the Finance Bill 2020 to an Act which Act now contains Section 38 whereat the President purports to exercise the powers granted by in Section 13(1) of the Customs and Excise Tariff ETC (Consolidated) Act but ignored the accompanying responsibility to rely on recommendation of the Tariff Review Board.
The plaintiffs also sought the following reliefs from the court:
“A declaration that Section 38 of the Finance Act 2020 is the by-product of non-compliance with statutory conditions precedent set in Section 13 of the Customs and Excise Tariff ETC (Consolidated) Act and therefore null and void ab initio rendering said Section 38 of the Finance Act 2020 liable to be struck down.
“A declaration that the President, subject to compliance with the precondition set in Section 13(1) of the Customs and Excise Tariff ETC (Consolidated) Act has the powers to modify tariffs, duties and levies without any reference, recourse and or resort to the 1st Defendant for approval or ratification.
“An order striking down all the provisions of Section 38 of the Finance Act 2020 as being invalidly made, null and void ab initio.
“An order of perpetual injunction restraining the 1st, 2nd, 3rd and 4th Defendants either by themselves, or agencies under them, parastatals and or organization, privies and assigns from implementing, enforcing, giving effect howsoever to the provisions of Section 38 of the Finance Act 2020.
No date has been fixed for the hearing of the case.
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