Vehicle Import Diversion: Clearing Agents Lose Jobs to Neighbouring Ports | Independent Newspapers Limited
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Vehicle Import Diversion: Clearing Agents Lose Jobs to Neighbouring Ports

Posted: Mar 9, 2016 at 1:00 am   /   by   /   comments (0)

Oladunjoye Phillip, Lagos

The implementation of the auto policy as regards the importation of fairly used vehicles is fast taking a huge toll on the economy, especially on clearing agents and other ancillary businesses that thrive at the ports due to diversion of inward cargoes to ports in neighbouring Benin Republic.
Independent learnt that since the introduction of the 70 percent tariff/duty on imported used vehicles, the country has been losing more than N200 billion annually, while those whose livelihoods depend on the ports are suffering since more than 50 percent of inward bound cargoes have been diverted to other ports to avoid payment of the new tariff and duty.
The situation has adversely affected most shipping companies as well as many clearing agents in the country as many of them have had to close shops, while some have relocated, throwing their employees into the labour market.
Mr. Ascanio Russo, Managing Director of Grimaldi Agency Nigeria Limited, at a stakeholders’ forum in Lagos, wherein the minister of transport was in attendance, said that the Federal Government loses about N200 billion annually to diversion of automobile imports to the Port of Cotonou in Republic of Benin.
The amount, according to him, represents the value of tariff that ought to have been collected by the Nigerian Customs Service if the vehicles are imported through Nigerian ports. He said Nigerians pay lower rates at Cotonou, maintaining that “there is clearly a problem of trade policy.”
Russo said manipulations of tariff rates by relevant agency of government was also responsible for the diversion of vehicles to the port in Republic of Benin by Nigerian importers, as there were no publication of cost of vehicles imported anywhere in the world.
He explained that while importers pay a fixed amount for vehicles, the percentage benchmark tariff collected at Nigerian ports was a huge source of problem for the importers, becoming a major reason for jettisoning Nigerian ports.
“In June 2015 when the duty increased as a result of auto policy, we saw immediately the effect. I think that the 35 percent tariff in addition to the 35 percent duty for used vehicles is too high and is a source of problem because the prices of vehicles are not published anywhere and it is left to the Customs to determine the rates,” he said.
Meanwhile, clearing agents are lamenting that the tariff has rendered them jobless.
For instance, President, National Council of Managing Directors of Licensed Customs Agents, Mr. Lucky Amiwero, said in a telephone chat with Independent that the 70 percent duty and tariff is affecting the whole operations at the Nigerian Ports. He said many Licensed Custom Agents have either closed shops or relocated for lack of business to do at the port.
“Come and look at the port; the whole place is empty. Most Customs agents have relocated. We don’t have anything to do again. Many of them have not been coming to the port for over three months now. Seventy percent of shipping agents are out of the port. Government has to check it. Government must look into it and do something. Government has not come out with a clear cut policy on what to do,” he said.
Mr. Francis Omotoso, a member of the Association of Nigerian Licensed Customs Agents and Managing Director of Francis Omotoso and Associates, told Independent on phone that the negative effect of the policy was obvious.
“The economy is in disarray. Nobody is bringing anything in again. Many Customs agents are out of jobs. They cannot even renew their licences.
“We will lose and the economy will lose in terms of revenue coming to the government because anything we are gaining the government is gaining ten times of that,” he said.
He noted that without the government providing the direction there is nothing the Customs can do.
“We understand the plight of President (Muhammadu) Buhari. We know that they are working on something. We only have to be patient to see what will come out of it. We are waiting on the government,” he said.
Meanwhile, Senator Ali Wakili, a retired Comptroller of the Nigeria Customs Service (NCS) had in an interview, said the hike in tariff on the second-hand cars may not only deny the country the needed revenue, but also emasculate the middle class.
“The new Customs tariff on cars needs to be reviewed downward because we need to re-establish the middle class in Nigeria. The relativity on items often affects the implementation. Nobody wants to pay high taxes, because the higher the tax, the higher the potential of smugglers to indulge in smuggling,” he said.
He noted that he had argued severally over the hike in tariff when he was the Area Comptroller of Seme Border, saying that the hike would not do the country any good.
“As a former Area Comptroller of Seme border, I have argued that the hiking of tariff on items does not help us. It takes away our attention from the anti-smuggling activities; we dissipate energy on running after one or two smugglers with the attendant risk of life on the smugglers and on our own personnel,” he pointed out.
He, therefore, advised that “government should know that the average citizen cannot afford to buy a new car, whether it is being produced by only PAN or other manufacturers; rather they would want to buy used cars. If they must buy second-hand cars, then we ought to encourage them to take the normal routes, charge them medium rates that they can afford to pay, and no one would want to take the tortuous smuggling routes.”
He also counseled that all the agencies responsible for the manning of the borders should work as one and not at variance so as to record meaningful achievement.
“And coming back home, all the agencies of states must see themselves as agencies of states, not each and everyone trying to be above each other in terms of price that this is my service and that is your force and so on. So at the borders, if we look at what is happening at the Mexican border or the francophone countries, you will notice that it is only from their berets or their insignia you will know that this is a Duane, this is a Gendarmerie or this is a soldier, all working towards the interest of their countries.”
He believes that if the country has an integrated approach in terms of managing its borders, it will achieve greater revenue. He, however, lamented that the current border management agency has been in comatose since its enactment.
The Federal Government had introduced higher duty and tariff on imported vehicles so as to encourage the assembling and manufacturing of vehicles locally. Since the implementation of the policy, Independent learnt that the cost of locally assembled vehicles is still beyond the reach of an average Nigerian.