15% NAC levy: Customs robbing Peter to pay Paul, says Ex-Controller

A former Controller of Customs, Lewis Ogunojemite has described the 15 percent National Automotive Council (NAC) levy imposed on imported vehicles by the Nigeria Customs Service (NCS) as illegal, saying that the Service cannot continue to rob Peter to pay Paul.

Recall that the NCS had, penultimate weekend, introduced the 15 percent levy, which is an addition to a 20 percent Customs duty on imported vehicles.

Customs Public Relations Officer, Timi Bomodi, in a statement said the move was in compliance with the Economic Community of West Africa Common External Tariff (ECOWAS) protocol.

According to Bomodi, “As allowed in Annex 11 of the 2022-2026 Common External Tariff (CET) edition and in line with the Finance Act and the National Automotive Policy, NCS has retained a duty rate of 20% with a NAC levy of 15%. New vehicles will also pay a duty of 35% with a NAC levy of 20% as directed in the Federal Ministry of Finance letter ref. No.HMF BNP/NCS/CET/4/2022 of 7th April 2022”.

But commenting on the development in a chat with Maritime Today Online, Ogunojemite criticized Customs for giving the impression of complying with the ECOWAS protocol by reducing the import duty on vehicles from 35 to 20 percent but went through the back door to introduce a 15 percent NAC levy in an attempt to retain the old duty rate of 35 percent.

He said, “The CET has been implemented in Nigeria since 2009 and this is the fourth one they want to implement now from 2022 – 2026. The agreement says that no country will charge more than between 0 and 20 percent but Nigeria never implemented it. Vehicles were placed at 35 percent which is wrong. It is now in this dispensation that ECOWAS is putting its feet down that Nigeria must comply. So, what Customs did now is to return used vehicles to 20 percent and put the 15 percent they remove and call it NAC levy. It is illegal. It is stealing.

“They remove the 15 percent because they just want to seemingly comply with the ECOWAS protocol and then reintroduce it as NAC, why? NAC has its own policy. 36 companies were registered to manufacture vehicles for Nigeria as far back as 20 years ago and some of them are bringing in new vehicles into the country as manufacturers. So why are we deceiving ourselves in this country?

“The 15 percent cannot stand. It is an illegal collection. It is like robbing Peter to pay Paul. How can the government be playing tricks?”

Ogunojemite added that NAC only recommended a two percent levy to encourage local production of vehicles but noted that even the funds collected could not be accounted for.

“When NAC was two percent, it was to be paid to encourage manufacturers and has that money been going to them? Let them tell us how many people are manufacturing vehicles in this country. There is a NAC policy and that policy has not changed the NAC collection from two to 15 percent. It is the Federal Ministry of Finance that just introduced the 15 percent. Two percent was agreed upon for NAC for development of local manufacturers so why do they go outside the policy to introduce NAC as 15 percent. What is the basis? I weep for this country. Customs should stop deceiving people. Why are they stealing from people and yet they are giving excuses? he quizzed.