FG urged to abrogate 15% levy on used vehicles, 1% CISS

By Steve Agbota

The former Acting National President of ANLCA, Dr Kayode Farinto, has called on the federal government to abrogate the 15 per cent NAC levy charged on used vehicles, imported into the country.

Farinto stated this while addressing newsmen in Apapa, said there is a need to scrap of 1 per cent Comprehensive Import Supervision Scheme (CISS), pointing out that the 4 per cent processing fees has replaced 1 per cent CISS.

However, he warned that imposing excessive levies and taxes without proper consultation with stakeholders would stifle trade, discourage importation, and push businesses towards smuggling.

He added: “In countries with structured economic policies, stakeholders are always carried along before the introduction of new charges, but Nigeria’s approach to taxation often ignores this principle.”

He bemoaned whether the government was deliberately trying to discourage Nigerians from importing used vehicles, adding that with the 15 per cent NAC levy and the 4 per cent Customs charge in place, vehicle prices would soar, further worsening the transportation crisis in the country.

He emphasized that scrapping the NAC Levy would ease the financial burden on importers while still generating revenue for the government.

Also speaking also on the new Tax bill being processed by the Federal government, he further raised concerns about the proposed Nigerian Tax Bill, which includes an increase in Value Added Tax (VAT) from 7.5 per cent to 10 per cent.

He criticized the government’s inconsistency, recalling that President Bola Tinubu had previously condemned the 7.5 per cent VAT rate, yet his administration is now seeking to raise it further.

Farinto pointed out that in many other developing countries, import-related taxes are kept below 1 per cent, ensuring that businesses remain competitive.

He warned that Nigeria’s high tax rates on imports could lead to a sharp decline in cargo throughput and increased capital flight.

He criticized the method of VAT calculation on imports, where VAT is charged not just on the cost of goods, but also on duties and other fees, adding that VAT should strictly apply to the Free on Board (FOB) value of goods, as done in international best practices.

“I had previously submitted a memorandum to the authorities proposing a correction of this anomaly, but his recommendations were ignored,” he said.

While acknowledging that the tax bill contains some positive provisions, such as allowing businesses to declare inactivity to avoid undue tax burdens, he insisted that the overall taxation system in Nigeria needs urgent reform.

“I urged maritime stakeholders to submit position papers to the National Assembly before the bill is passed, warning that failure to address these pressing taxation issues could further weaken the country’s economic stability,” he added.

Conversely, he called on the Federal government to take immediate action, urging authorities to suspend the NAC levy, eliminate the CISS charge, review the VAT calculation method, and sensitise stakeholders before the implementation of the 4 per crnt Processing Fees by Customs to allow for proper stakeholder engagement.

He insisted that these measures are necessary to prevent excessive taxation from crippling the economy and making Nigeria less competitive in global trade.