By Stephen Ubanna
For much of last week there was palpable tension at the Tin- can Island port and Port-multi-services Terminal Limited, PTML, over the differential duty rate on imported vehicles into the country. Note that there are two major RORO facilities at the Lagos port of Tin-can Island PTML, though which vehicles, both used and could be imported into the country.
Recall that most of the vehicle importers from taking delivery of their transit vehicles, from Republic Benin ports of Autonomous Port of Benin , Cotonou and Bollore port, had relocated to the Lagos ports of Tin-can Island and PTML, when President Muhammadu Buhari, a retired Army Colonel, banned the importation of vehicles through the Land borders across the country.
Recall that between February and early March 2022, aggrieved agents had grounded the Lagos port of Tin-Island, PTML, Port and Cargo Terminal and Car Park C, over the introduction of the Vehicle Identification Number, VIN, for valuation of vehicles.
The agents had mounted severe pressure on the Customs Management forcing it to go back to the drawing board to fine -tune the VIN policy. Adekunle Oloyede, described as Information Communication Technology, ICT, guru, had reportedly said that the Management had shot down the VIN because of lack of understanding of the workings of the policy by the trading public. Even the Nigeria Customs Service, NCS, also have their short coming in coming out with the policy.
Althoughm the Customs Authorities had said that the implementation of the policy was suspended for one month ‘’to allow the vehicle importers with their Agents to clear the backlog of vehicles held up at the ports and terminals due to the protest by the Agents over the introduction of the VIN and the high duty on imported vehicles.
Indeed, what may have caused trouble at the port and other vehicle terminals in Lagos, the nation’s Commercial nerve centre is the 35 % duty rate on imported vehicles into the country which based on the earlier memo sent by the Management to the Area Controllers on imported vehicles and 20% found on the Customs website. The agents were in a state of confusion whether to still be capturing their vehicles on the 35% duty rate or the new 20% found on the website. The a Agents worry became more pronounced as there was no categorical Statement from the Customs Management over the new 20% duty rate on imported vehicles.
Timi Bomodi, a Deputy Comptroller and Customs spokesperson, may have made matters worse when he described the information on the website about the 20% duty rate on imported vehicles it as a ‘’mix up’’. He had said that the Customs Authorities has’’ no plan to review the current duty rate of vehicles from 35% to 20%’’, insisting the old duty rate of imported vehicles of 35% still subsists.
Unknown to him, the Economic Community of West African States, ECOWAS, Leadership, had adjusted the economic bloc Common External Tariff, CET, trade portal on vehicles under the HS Code 703, to 20% without officially communicating the member countries which included Nigeria.
The apparent confusion at the ports and terminals over the actual duty rate to collect on the imported vehicles through the nation’s seaports and terminals, 35% or 20%. Based on the 20% may have encouraged Kayode Farinto, the vocal Vice President of Association of Nigerian Licensed Customs Agents, ANLCA, to call on Freight Forwarders to cue into the 20% vehicle rate of duty to capture their documents and damn the consequences.
A senior Customs officer confirmed that there was apparent confusion between Friday, April 1, 2022 and Tuesday, April 5, 2022, as the officers on the Vehicle Seat and Customs Processing Center, CPC, at Tincan Island PTML, insisted on collecting the 35% on imported used and new vehicles as against the importers with their Agents position claim that it has been reduced 20% duty on imported vehicles, citing the information on the Customs website.
Aware the confusion over the duty rate of 35% or 20% hat had appeared on the Customs website may force the agents to embark on another round of protest which will cripple the Tin-can Island port and terminal operations in Lagos may have encouraged Oloyede, the Tin-can Island Command, Customs Comptroller to take up the matter with the Management last Tuesday to ascertain if the information on the website regarding the 20% duty rate on imported vehicle was authentic or whether the Command should continue with the collection of the 35 duty rate on imported vehicles.
This may have paid off as he was able to confirm that the 20% rate duty on imported vehicles that had appeared on the Customs website was official and therefore supersedes the earlier memo that had approved 35 duty rate on imported used and new vehicles and 10% for Commercial vehicles.
Based on the clarification from the Customs Headquarters that the 20% duty rate on imported vehicles, both used or new, was official may have given him the boldness to broke the news to the officers on the vehicle Seat, Compliance and the Command the CPC, personnel to revert to the collection of the 20% rate of duty on imported vehicles. The information may have spread, thus saving the port from another major crisis.
Informed sources told The Value News that vehicle importers and their agents who have visited the port to delivery of their vehicle had heaved a sigh of relief when they were told to capture their imported vehicle documents on the 20% duty rate instead of the old rate of 35%.
It was gathered that at PTML, Bello Ahmed, a Deputy Comptroller and the Command Automated Project Manager, APM, had to go through the document several times on the Customs website before he could put his hand on any agent’s document for such payment to be made.
Although, the Customs Authorities have not issued any categorical Statement about the 20 % new rate of duty on imported vehicles, but the Area comptrollers were said to have been told to use the message on the Customs website as a working document for processing agents’ client’s vehicle documents.
With the collection of the old vehicle duty rate of 35% and 10%, PTML, was said to have generated about N51.63 billion between January and March 2022, on imported used and new vehicles, compared to the N46.85 billion that was collected within the same period in 2021, showing a 10.2% on the volume of vehicle imports into the country through the terminal.
An elated Comptroller Felix Okun, the Command Area Controller had attributed the increase in the revenue generation from imported vehicles through the Terminal as an ‘’evidence of improved productivity on the part of the officers and men of the Command despite operational challenges’’.
Muhammad Yakubu, a Deputy Comptroller and the Command spokesperson, may have spoken the mind of the Area Controller, when he disclosed that ‘’the Command will always live up to its responsibilities of monthly revenue collection target , suppression of smuggling and trade facilitation’’.
Perhaps, to ensure that one month grace period granted the importers with their agents did not elapse without the backlog of vehicles at the terminal being cleared before the implantation of the VIN, Comptroller Okun, was said to have urged the Agents ‘’to maximize the quick potentials of the Command by being compliant all the time through making of correct declarations and obeying all extant rules as contained in the Customs and Excise Management Act, CEMA, Cap 2004, import and export prohibition lists as well as other documents of trade instruction.
He was said to have also given a word of advice to the officers on the Vehicle Seat and the CPC, ‘’to remain uncompromising in the discharge of their duties ‘’. He may have sent a message to the importers with their agents that ‘’it is more expensive to be Non- Compliant to take delivery of their vehicles at the terminal because of the cost implications.
. He had said that the Agents stand the chance of losing their client’s cargo to the government as it may be seized over alleged infraction of false declaration, Concealment, Wrong Classification and under payment,. He had had said that the Agent and the importer could be arrested, detained, or be issued with Demand Notice, DN, and other penalties, which must be paid before the cargo can be released.
He has told those that cares to listen that ‘’the genuine importers with their agents, will continue ‘’to enjoy timely and cost saving services from the Customs and other Regulatory agencies personnel at the port. He may have had at the back of his mind the Nigerian Drug Law Enforcement Agency, NDLEA, National Agency for Food And Drug Administration, NAFDAC, and Standard Organisation of Nigeria, SON, including the Nigerian Police Force, NPF, personnel at the port among others.