New duty regime will increase cost of vehicles: Nigeria

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MOTOR dealers have raised the alarm that the new exchange rate being used for the calculation of import duty on vehicles will lead to a rise in the cost of imported vehicles.

Recall that the Nigeria Customs Service (NCS), acting on a policy move by the Central Bank of Nigeria (CBN), raised the exchange rate used for the calculation of import duty from N422.30/dollar to N589/dollar.With this new duty regime, the total duty payable on a Toyota Camry which used to be N901,000, has now been increased to N1,270million. Also, checks by the Nigerian Tribune revealed that the duty payable on Venza was N1.632million before now, but has been increased to N2.278million. In the same vein, Toyota Corolla was N786,000, but now has been increased to N1.097million while Lexus Rx which used to cost N1,828,000 now costs N2,550,447.

Speaking with the Nigerian Tribune exclusively on the development, National President of the Association of Motor Dealers of Nigeria (AMDON), Prince Ajibola Adedoyin explained that whatever arises as difference from the new duty regime will be transferred to the end users of the product.

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According to Adedoyin, “Yes, we read in the news about the new Customs exchange rate for the calculation of import duty from N422.30/dollar to N589/dollar. This is a 40 percent hike and will definitely affect cost of vehicles because you don’t expect us (motor dealers) to sell at a loss.

“The end users will bear the cost of the increase. I can assure you that the cost of vehicles will rise by 40 percent if not more than.

“If care is not taken, the new policy will lead to an increase in rate of accidents on our roads because vehicle owners who should normally change their vehicles will not want to do so due to the high cost of vehicles.

“With cost of vehicles going up due to the new duty regime, many people whose vehicles are due for a change will still be managing the ones that they have. And one thing about vehicles is that once a vehicle reaches the end of its life span, repairing it is no longer necessary. If you keep repairing it, you are exposing yourself to accidents because every aspect of the vehicle will keep malfunctioning unexpectedly.

“We hope the Federal Government reverses its decision. If they don’t, then Nigerian vehicles owners should brace up for harsher realities as regards the cost of vehicles.”