After so much controversy that the vehicle duty verification programme of the Nigeria Customs Service generated, the policy eventually was put on hold. YUSUF BABALOLA writes on the politics and economics of the policy suspension.
This is arguably not the best of time for the embattled Comptroller-General of the Nigerian Customs Service (NCS), Col Hameed Ali (rtd) as he is currently under the microscope not only from the Nigerian Senate over the controversial Vehicle Duty Verification policy. The Nigerian Senate described the policy as anti-people and ill timed especially at a time the country is in recession.
The upper legislative chamber however asked the Customs CG to suspend the implementation until the necessary committee in the hallowed Chamber is properly briefed. Though, the CG was firstly adamant to see to the implementation of the policy but after so much pressure from the Nigerians and the Senate, the Customs management backed down and suspended the policy.
How It Started
Earlier in the year, Association of Motor Dealers of Nigeria sought the support of Customs to create a platform for payment of duties for vehicles that were smuggled into the country based on the federal government’s policy banning importation of vehicles through the land borders.
The association wanted to ensure that smuggled vehicles that escaped duty payment at the border have their papers regularised. This according to sources in the Service was the reason why Customs gave a month’s grace to enable all vehicle owners who had yet to pay duty, to do so. “Many car owners who have not paid duties have been calling our zonal office and some had been calling on phone that they want to come and pay duties on their vehicles” said a Customs source.
Customs Management Intervention
In March, the Customs management approved a one month grace period from Monday 13th March to Wednesday 12th April 2017 for owners of all vehicles within the country whose customs duty has not been paid, to do so. The CG advised all motor dealers and private owners of such vehicles to visit the nearest Customs Zonal Office to pay the appropriate Customs Duty on them.
The CGC thereafter called on all persons in possession of such vehicles to take advantage of the grace period to pay appropriate duties on them, as there would be an aggressive anti-smuggling operation to seize as well as prosecute owners of such smuggled vehicles after the deadline of Wednesday April12, 2017.
He further directed all private car owners who are not sure of the authenticity of their vehicles customs documents can also approach the Zonal Offices to verify with a view to complying with the provision of the law.
Vehicles Targeted by the Policy
LEADERSHIP Sunday investigations have shown that the policy was not targeted against individual car owners but vehicles dealers who smuggled trapped vehicles into the country. A source in the Customs said the policy was not meant for vehicles already plying Nigerian roads but subsequent ones who may have been smuggled in without proper duty payment.
“After this grace period any vehicles that is arrested and duty was not paid or correct duty was not paid would be seized and the dealers who sold the vehicles would be arrested and prosecuted” the source. He informed Sunday LEADERSHIP that the service also used the policy to target powerful Nigerians who import vehicles into the country without proper duty payment.
Evasion of Customs Duty by influential Nigerians
For instance, in December last year, a Mercedes X class belonging to a top oil magnate was intercepted by Federal Operations Unit, Zone A Ikeja and after thorough investigation, it was revealed that Customs duty was not paid on the Mercedes X-Class. The vehicle was however detained with Debit Note (DN) raised on the vehicle before appropriate duty was paid on it.
Also, in January 2016, the vehicles of a former Minister was intercepted and upon investigation accused of evading Customs duty on some of his luxury vehicles imported into the country. The vehicles’ duty ought to be N124 million but upon investigations, it was discovered a mere N300,000 was paid, thus defrauding the government of about N123.7 million.
Vehicle Owners Kick, Stakeholders Disagree
Vehicles Owners Association of Nigerian (VOAN) also expressed disappointment and opposition to the Customs ultimatum to all vehicle owners in the country to pay the duties on their cars between March 13 and April 12, failing which they would have their cars impounded. They described the policy as unrealistic, with VOAN threatening to drag the Customs Service to court if it fails to withdraw the directive within seven days.
VOAN, in a letter to the Comptroller-General of NCS, Col. Hameed Ali (rtd.), through its counsel, Tolu Babaleye, called on the Customs Service to consider the interest of 35 million Nigerians who would be adversely affected by the “ill-timed and ill-conceived” policy if enforced.
Also, the Association of Nigerian Licensed Customs Agents (ANLCA) and the Shippers’ Association Lagos State have disagreed over the one-month grace given by the Nigeria Customs Service (NCS) concerning payment of vehicle duties. The national president of ANLCA, Olayiwola Shittu, advised the Customs Service to make the deadline for duty payment on vehicles open-ended, saying the policy would check smuggling.
The president, Shippers Association Lagos State, Jonathan Nicol, described the Customs policy on vehicle duty as outdated and not in conformity with the current trend in world trade. However, Mr. Shittu said that such a policy should be extended or be open-ended so that the duty on some vehicles that passed through Customs and not properly cleared, would be paid.
The Customs agent said if Customs pushes through its policy, vehicles owners would be forced to pay duties on vehicles that were not cleared but found their ways into the country. He said the new policy would discourage smuggling along the land border areas. “Anybody who has a vehicle imported through the land border should check with Customs, if correct duties were paid.
“Some people go to Cotonou to buy vehicles and they pay duties, while the smugglers take them through unapproved routes. Anyone who finds himself in such a position will be embarrassed,” Mr. Shittu said. On the other hand, Mr. Nicol decried the insistence of Customs to apply the new policy on vehicles that are already in use. He described the policy as “outdated”, saying that such a policy did not conform to the current trends in world trade.
“Customs should go back to the drawing board if smugglers beat their network,” he said. He said there was no vehicle that passed through the border without paying duty, whether official or non-official.
After many controversies that greeted the policy, the Customs Service suspended the policy. The Customs in a statement said, “Following the unnecessary tension generated as a result of misconception and misrepresentation of the Nigeria Customs Service planned motor duty payment, the leadership of the National Assembly and the Comptroller-General of Customs, Col. Hameed Ali (Rtd) met with a view to resolving the impasse.
“They both agreed that the proposed motor duty payment, though in line with the provision of Customs and Excise Management Act (CEMA) Cap C.45, LFN 2004 should be put on hold while the Senate Committee on Customs and Excise interfaces with the NCS for further discussions.
“While payment of duty on vehicles or indeed any dutiable imported item remains a civic responsibility of every patriotic Nigerian, NCS management has directed that the exercise be put on hold while expressing readiness to engage the Senate Committee on further discussions to bring them on board to understand the importance of the exercise to national security and economy.
Implications of Policy Suspension
With the suspension of the policy, smuggled vehicles with no valid Customs duty will renege to regularise their papers. Also, the government has lost an opportunity to shore up its revenue. This is because the government would have gained revenue it lost to smugglers even if it is at a discounted rate. It is hoped the Customs management and the lawmakers would find a common ground and resolve the matter soonest in order to curb smuggling which is an economic sabotage the national purse.