- The new exchange rate policy of the Nigerian government has caused a drop in the sales of Tokunbo vehicles
- The new rate was implemented by the Central Bank of Nigeria and the Nigeria Customs Service
- In a July 6, 2023 circular, the Nigeria Customs Service said the rates have been hiked from N422.30 per dollar to N589 per dollar.
The newly introduced 40% hike in the exchange rate for cargo clearance at the seaports and hike in tariff on imported vehicles by terminal operator Ports and Terminal Multipurpose Limited has caused about 70% decline in the sale of fairly-used or second-hand imported cars in Nigeria.
The Central Bank of Nigeria (CBN) and the Nigeria Customs Service recently took the ongoing forex reforms to the maritime sector with a 40% hike in the exchange rate for calculating the import duty.
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CBN and Customs rates hike caused drop in car sales in Nigeria
Punch reports that the Nigeria Customs Service raised the exchange rate used to calculate import duty from N422.30 per dollar to N589 per dollar.
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On Thursday, July 6, 2023, the CBN raised the exchange rate for cargo clearance by 31%, moving from N589 per dollar to N770 per dollar.
The Customs Services disclosed the information in a July 4, 2023 circular titled ‘Implementation of the floating foreign exchange rate’ signed by the Assistant Controller General, I.T. & Modernisation, K.I. Adeola.
The circular reads in part:
“The CBN has instituted the floating exchange rate regime, which has given rise to constant changes in the exchange rate for trade. The policy is to be implemented by all government ministries, departments, and agencies, including the NCS.”
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The Customers Service directed its area controllers to ensure the information got to relevant stakeholders.
The Youth Leader of the Association of Nigerian Licensed Customs Agents, Tin Can Island Chapter, Remilekun Sikiru, stated that the directive got to group members in the early hours of Thursday, July 6, 2023.
He said that a 2014 Toyota Camry, cleared for N1 million before introducing a Vehicle Identification Number VIN for removing imported vehicles, is now being cleared for 1.9 million.
New price list for clearing different cars
“The actual duty on Toyota Camry is N705,000, while the total duty and clearance cost is N1.7m; for Corolla, the duty is N558,000, and the total clearance cost is N1.3m; Sienna duty is N930,000, and full clearance cost is N2.2m; duty on Highlander is N1.1m, bringing the total clearance cost to N2.6m; duty on Venza is N1.2m and the total cost is N3m.
“For Lexus RX350, the duty is now N1.5m, bringing the total clearance cost to N3m; duty on Lexus ES350 is N1.3m, and the total cost is N3m; for Toyota RAV4, the duty is N831,000, and total cost of clearing it is N1.2m; Honda Pilot’s duty is N966,000, and the total clearance cost is N2.2m; Honda Accord’s duty amounts to N769,000, and total clearance cost is N1.8m; for Toyota Tacoma, the duty is N417,000 and total clearance cost is N818,000. These vehicles are from 2001 to 2014.”
Total clearance cost means the duty payable on a car and the surcharge, ECOWAS duty, and the seven percent port duty.
Total duty or total clearance cost means the duty payable on a car plus the surcharge, ECOWAS duty, and the seven percent port development levy the prices would be hiked.
Nigeria Customs Service National Public Relations Officer, Abdullahi Maiwada, said the new exchange rate is on the agency’s portal.
Tinubu signs executive order stopping levy on imported vehicles, 10% tax on telecom services
Legit.ng reported that President Bola Tinubu signed four new Executive Orders on Thursday, July 6, 2023, two of which stopped the new levy on imported vehicles and proposed a 5% tax on telecom.
The Executive Orders suspended the import adjustment tax imposed on certain vehicles.
According to Dele Alake, Special Adviser to the President on Special Duties, Communication, and Strategy, the IAT was approved by ex-President Muhammadu Buhari and was to take effect on June 1, 2023.