Planned 5% levy threatens N264bn auto investment — Firms

The move by the Federal Government to slash duties on imported vehicles from 35 per cent to five per cent would kill the automobile industry, manufacturers and stakeholders have cried out.

In a twist, President Muhammadu Buhari on Monday at the 26th Nigerian Economic Summit, said all MDAs have been directed to buy only locally made vehicles to boost patronage.

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According to them, the development poses threat to over N264 billion investment in Assembly plant by local automotive assemblers.

Daily Trust reports that the proposed is contained in the 2020 Finance Bill presented before the National Assembly.

But local auto assemblers have kicked against the Bill which they said would sound a death knell on the industry having invested over N264bn in setting up plants.

Our correspondent reports that the Federal Government had recognized 58 companies including those privatized by the Bureau of Public Enterprises (BPE) as automotive assemblers in full compliance with local content guidelines under the National Automotive Industry Development Plan (NAIDP) 2017/18.

The programme birthed the technical partnership agreement between registered Assembly Plants (APs) and Original Equipment Manufacturers (OEMs) with the endorsement of the National Automotive Design and Development Council (NADDC).

Daily Trust gathered that the technical partnership culminated in the cumulative investment commitment of $756 million or N264bn made by the local assemblers in five years of implementation of the NAIDP.

The installed capacity and total net worth of the partnering OEMs is also estimated at $748bn representing a pipeline for investment and the potential for growth of the industry in Nigeria.

Former Acting Director-General of NADDC, Mr. Mamudu Luqman said the proposal should be dropped and urged the Federal Government to allow the automotive plan, which is due for review in 2024, to run its course.

He accused the Nigeria Customs Service (NCS) of “sneaking” in the clause in the Finance Bill, saying, “It has been their determination to terminate the Nigeria automotive programme which has ramped up to nearly 600,000 vehicles per annum.”

But the NCS has dismissed the allegation, saying there was nothing like sneaking in the clause.

Spokesman of NCS, Joseph Attah said the Comptroller-General of the Customs, Col. Mohammed Ali, rtd, has been advocating for the reduction, saying Nigerians are applauding the move.

“The Comptroller General of Customs has been advocating for the reduction of the levy on brand new vehicles for a long time now. At different forums, he had made the stand of the service on the issue of high vehicle tax known,” he said.

But Luqman, who is the Managing Director of Transtech Industrial Consulting insisted that the Bill is not in the interest of the country.

Daily Trust learnt yesterday that the National Automotive Manufacturers’ Association (NAMA) held an emergency meeting in Lagos over the proposal.

Chairman of TSS Limited, assemblers of Shacman trucks, Mr. Frank Nneji, said the proposal would reverse the gains made in the National Automotive Plan and called on the Federal Government to reverse it.

“The government doesn’t seem to have consulted very well on that because they are going to shut down an entire industry by that and people would be shut out of jobs,” he said.

Also speaking, Chinedu Oguegbu, founder of OMAA Global said the government should take a second look at the proposal, saying there should be some cohesion in the automotive policy.