Vehicle Duty: New Twist on Customs’  Directive

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Hameed Ibrahim Ali

Although the Senate has halted the Customs’ directive that vehicle owners should go for verification to ascertain their duty payment status, stakeholders appear divided on the  matter. Francis Ugwoke writes 

For the Nigeria Customs Service (NCS), this may not be the best of times. It has been one controversy after another.  And all has had to do with a clash of interest between the Customs Service in its anti-smuggling operation, revenue generation drive and Nigerians. Nigerians, this time, enjoy the support of members of the National Assembly. First, it was the issue of ban on importation of vehicles into the country through the land borders, a policy that shocked, not just the importers and all other dealers involved in the business, but also other Nigerians.

The policy, which is another way of checking smuggling through the borders and improving  traffic at the seaports, has   also thrown thousands of Nigerians out of business and employment. It has also pushed up the prices of vehicles by close to 100 per cent.  The implication is that a car of about N1 million before December last year is now going for about N2 million. It is this same policy that has continued to haunt everyone. The Customs had last week issued a new directive that is believed to have a link with the vehicles trapped at the border stations as a result of the ban placed on the importation of vehicles through the border stations. In a statement credited to the Comptroller-General of the Customs,  Col Hameed Ali (rtd),  owners of all vehicles whose duties have not been paid were given a one-month grace period to do so.

 

The Customs’ Directive

In a statement issued by the  Customs   Public Relations Officer, Mr Joseph Attah, the Service  called on all  vehicles owners whose duties have not been paid to go and  pay  between March 13 and April 12. The owners of the vehicles were threatened that failure will attract seizure of the vehicles and prosecution of the owners after the expiration of the deadline. Owners of vehicles were required to approach Zonal offices to verify the status of their vehicles. The statement from  Attah read: “The CGC therefore calls on all persons in possession of such vehicles to take advantage of the grace period to pay appropriate duties on them, as there will be an aggressive anti-smuggling operation to seize, as well as prosecute owners of such smuggled vehicles after the deadline of Wednesday 12th April, 2017.

“For the avoidance of doubt, all private car owners who are not sure of the authenticity of their vehicles’ customs documents can also approach the zonal offices to verify their status with a view to complying with the provision of the law.” 

Since then,  many Nigerian car owners have been thrown into confusion because there was a communication gap on the part of the Customs in giving further explanation on the directive other  than  the statement it issued. It was gathered  later that the directive was mainly for  the benefit of owners of vehicles that were trapped at the land  borders after the expiration of the December 31 deadline on clearance of such vehicles.  Customs brokers had claimed that there were no less than  300,000  of such vehicles, a claim that has been dismissed by Customs.

 

Order from the Senate

On Tuesday, the Senate issued an order directing the Customs Service to halt   its earlier directive to vehicle owners to go for verification of their vehicles status in terms of duty payment or face the wrath of the law. The Deputy Majority Leader, Bala Ibn Na’Allah, said the order was  ridiculous since there was no clear guideline on the category of vehicles involved. According to him, such order will create confusion and discomfort for innocent Nigerians. Na’ Allah observed that there was no law in the first place to back the order of the Customs CG.

He said: “Mr. President, the basis for being here as parliamentarians is to define the rule of engagement between us and those who elected us into this very, very coveted office, to the effect that we would all swear to uphold, protect and defend the Constitution of the Federal Republic of Nigeria and the law. We already have an existing law called the Nigerian Customs Service.

“Mr. President, by that law, we are all aware that the area of operation specifically designated for this service is principally our borders and we are aware of the fact that this is the situation and unable to find the specific provision of the law that the comptroller of customs relied upon to issue this circular.

“I think we have a compelling need to protect the Nigerian public against this arbitrariness. I ask if I buy a car eight years back for example, duly registered and I live in Sokoto, and then, you require me to come to Kaduna to know whether my customs duty is authentic or not. What you are requiring from me is even outside the provision of the law.

“It is the responsibility of the Nigerian customs to verify this document and if they now shift it back to the citizens to determine whether what they have is authentic or not, I think it’s sufficiently ridiculous to call the attention of this Senate to say no to this kind of arbitrariness.” 

Na’Allah  was supported by many Senators, including the Deputy Senate President Ike Ekweremadu, who pointed a number of excesses of the Customs Service, such as the seizure of bags of rice belonging to  Sango-Otta, Ogun State  market women. Ekweremadu made it clear that the Customs has no power to punish Nigerians over offences that were committed in the past.

Ekweremadu was quoted as saying, “today, we have been inundated again with another development where owners of cars bought many years ago are being asked to come back and show customs papers or pay appropriate customs duties. Let me also say that we share the concerns of the customs boss on raising revenue to run our country but unfortunately it cannot be at the expense of common sense and illegality.”

 

Where Customs  Erred

There are two issues on the customs directive.   The order was to take care  of some smugglers, whose vehicles  have no evidence of duties paid.  The second was to allow importers whose vehicles were trapped in the borders after the deadline on their clearance  ended December 31.    Sources close to some senior officials of the Customs have had to explain this. Observers  said it  was  a cover-up when the Service issued a directive generalising  it to cover all Nigerians,  who may have bought cars and issued with fake customs  documents.  The real motive of the Customs was  confirmed  last week when  the Customs Public Relations Officer, Zone A,  Mr. Ephraim  Haruna,  revealed  that one of the automobile associations  requested  the Service  to create a platform  where importers who have smuggled vehicles can still pay duties.   He said that this was the reason for the one-month  grace period to enable owners of such vehicles to pay duties. He was quoted as saying,    “many car owners who have not paid duty have been calling our zonal office and some had been calling on phone that they want to come and pay duty on their vehicles.”

 

Stakeholders’ Views

Stakeholders are divided on the customs directive for obvious reasons.  Innocent car owners and customs agents are against the order because of the confusion it will create. To them, it means that after the one-month  grace period, a road-block will be mounted by the Customs to check all vehicles on the  road whether they paid duties or not. But this position is different from auto dealers, who have vehicles smuggled into the country without evidence of duty payment. 

There are also customs agents, whose clients have vehicles trapped in the border stations and who want to pay duties and bring these vehicles into the country.  President of National Council of Managing Directors of Customs Agents, NCMDCA, Mr. Lucky Amiwero,  who condemned the order from the customs  wondered how the customs boss wants people, who bought cars some years back to now go and verify  whether the duties  they  paid were correct or not.

Amiwero said, “Such order will create confusion.  Besides, the CG has no   power to issue  such directive on grace period. It is the minister who should do so. There is no law  that gives the CG such  powers”.

Amiwero argued that since such vehicles have entered free period, their owners ought    to be left alone, adding that it was like Customs going to the market to  seize goods as they have no such  power.  Maritime lawyer, Mr. Kasa Opara, also criticised the customs order, describing it as an act of illegality. Opara said such directive is never covered by law. According to him, such policy will create a state of panic among many car owners.  

Opara, however, said it would be understood if the customs leadership makes it clear that the grace period is for those whose vehicles were trapped in the border stations. 

Speaking on the same issue,  the President of the Association of Nigerian Licensed Customs Agent, ANLCA, Prince Olayiwola Shittu, was however reported as saying that the deadline for the payment of duties should be open-ended  to check smuggling.

He said the deadline should be extended so that owners of vehicles which passed through customs and not properly cleared would pay the required duties. But another freight forwarder, Chief Tony Ojemba, described such idea as both indicting the customs for corruption,  inefficiency and  encouraging smuggling activities.   

Ojemba opined that while it was good to give owners of trapped vehicles time to pay duties and bring the vehicles in, introducing an open-ended period for this will further  encourage  more smuggling.

He said either government cancels the ban placed on importation of vehicles through the land borders or allow those trapped to come in under a specific period and tighten the borders.

Ojemba  said auto association, who said their members  have  vehicles  in the country  without payment of duties should explain how the vehicles came in.  He said members of such association may have smuggled the vehicles through the connivance of some customs officers  and now want to perfect the documentation.