Duty on used cars remains 35% - Aganga
Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, on Wednesday said that duty on used cars remains 35% and has been increased to 70 per cent with effect from July 1 based on the new National Automotive Policy as speculated in some sections of the media. The minister droped this hint in an interview with State House correspondents at the end of the weekly Federal Executive Council meeting during which he said he briefed council members in order to correct the misrepresentation. According to Aganga, all those assembling cars in the country would be allowed to import at 35 per cent duty to bridge the gap that may arise between demand and supply, adding that 70 per cent duty would be applicable to those who he said are not ready to assemble cars locally but prefer to engage in trading by bringing the commodities from abroad. “The decision was aimed at protecting those assembling cars locally and make importation unprofitable, hence unattractive.
'The article (media report) had claimed that the duty on used cars is now 70 per cent from July 1, that is incorrect. It is 35 per cent.'It (the report) also claimed that all used cars now coming into the country would pay duty of 70 percent, that again is incorrect.
“For all those in the auto policy programme, all those assembling cars in the programme, the policy is that they would be able to import cars to meet the gap when you look at production and the demands in the country, they would be able to import those cars at 35 per cent, so it is not 70 per cent.
“It is only for those who are putting strain on our foreign reserves, those who have no intention to create jobs, those who want to continue to remain traders that the 70 per cent applies to and this is to discourage trading.
“It is to encourage local assembly and job creation and stop unnecessary pressure on our foreign reserves. So it is an economic issue and it is very deliberate.
“We would you import cars at 70 per cent while others are importing at 35 per cent ? So, we do not expect to see anyone importing cars at 70 per cent. It was just a measure to encourage people to go within the policy group. “When you look at the blended rate of those in the auto programme for the CKDs, SKD 1 and SKD 2, they bring to the country, they only pay duty of zero per cent, five per cent and 10 per cent.
“So when you look at the blended rate of what they produce locally and what they import, it is just above 20 per cent. That is the policy and that is why all the manufacturers, assemblers of cars which include some of the major distributors of cars and importers of cars before, companies like sterling, even Cocharis they have given an undertaking they will not increase their prices at all. Anyone who wants to buy cars from anyone of them, they will find out that none of them plans to or has increased prices at all,” Aganga said.