STOAN: Reduction of Import Duty on Vehicles Will Stop Smuggling


By Eromosele Abiodun

The Seaport Terminal Operators Association of Nigeria (STAON) has said that government’s move to stop smuggling of vehicles into the country  by banning  importation through land borders will not yield desired result if not complemented with a corresponding reduction in customs duty.

STOAN Spokesman, Mr. Bolaji Akinola disclosed this in a statement in Lagos.

Speaking against the backdrop of the new Vehicle Identification Number (VIN) scheme announced this week by the federal government, Akinola said: “The rate of smuggling in Nigeria especially of vehicles is alarmingly high. This is essentially due to the high and prohibitive import duty on vehicle which is more than twice what obtains in other countries in the sub-region.

“While the VIN scheme sounds like a good idea, it may not do much to check smuggling. The main antidote to smuggling is the reduction on Customs duty on vehicles to bring it to the level obtainable in other West African countries. The duty should not be more than 10 per cent. Why exactly are people landing their vehicles in the ports of neighbouring countries and smuggle into Nigeria? It is to avoid the high Customs duties at the port,” he said.

Akinola said it is difficult to check smuggling through the land borders because of the preponderance of illegal entry roués into the country.

He said: “There are more than 1,600 illegal entry routes into Nigeria. The borders are porous. It will be difficult for any agency of government to effectively patrol and check the influx of goods and persons through those porous entry points. There is a need to mount barriers and build strong high walls or electric fences at most of those entry points. Most importantly, government must deploy technology to secure our borders.”

He argued that the high rate of import duty on vehicle has shot up the prices of vehicles beyond the reach of many Nigerians as “the prices of vehicles have doubled over the past 18 months”.

“This is due to the high Customs duty, which is 35 per cent plus an additional surcharge of 35 per cent bringing the total government tariff to 70 per cent. This is way too high and when you place it side by side the high rate of foreign exchange, you see why Nigerians are paying more to acquire cars. The ban on importation through land borders is not enough to check smuggling and bring down the prices. Only a reduction on Customs duty will achieve that,” he added.

The STOAN Spokesman also said that there are too many government agencies operating at the port. This, he said, is contributing to the high cost of doing business at the port.

“The high cost of doing business at the port, which many allude to, is not because of high charges by operators but due to high Customs tariff and multiple chaecks by government agencies.

Reduce Customs duty, reduce the huge crowd of government agencies operating at the port and automate the Customs clearing process, which is way too manual and regressive. Someone described the Customs clearing process as archaic and way too expensive. There are multiple checks within and outside the port, which must be tackled by government. Former Finance Minister Mrs. Ngozi Okonjo-Iweala ejected the agencies a few years ago but they are all back in their multitude,” he said.

Akinola added that Nigerian ports have ample capacity to handle both import and export and to support the federal government’s revenue diversification drive.

There is ample capacity at the port. Most terminals are operating at less than half their capacities. Our ports were boisterous until the Jonathan administration enacted some policies that chased shippers away. This government will etch its name in gold by reversing those ill-advised policies so as to bring back activities and jobs to the ports,” he added.