Regulatory Alerts2014-01-20 | TED/FEM/FPC/GEN/01/003Re: Fiscal Policy Measures For Automotive Industry
The Nigerian Federal Government has introduced new Fiscal Policy Measures effective from October 9, 2013 for the Automotive and Tyre Industries. For Motor Vehicles, a 35% duty is applied to Fully Built Unit (FBU) Cars under HS Code 87.03 along with a 35% levy. Commercial Vehicles also attract a 35% duty without any levy. Local Assembly Plants enjoy 0% duty for imported Completely Knocked Down (CKD) and Semi-Knocked Down One (SKD). In the Tyre Industry, duties payable on car tyres (HS Code 4011.1000.00) have been harmonised at 20% duty and 5% VAT. Lorry/Bus tyres under HS Code 4011.2000.00 also incur a 20% duty and 5% VAT. The importation of machinery and equipment for tyre production is now duty-free, and Pioneer status has been granted to all Tyre Plants. For the control of under-declaration of vehicle values, Nigeria Customs Service (NCS) will publish the price of new vehicles annually and use a depreciation method to determine the value of used vehicles. To combat smuggling and resolve consumer complaints, all Vehicle Dealers and Importers for sale to the public require licensing by the National Automotive Council of Nigeria. These fiscal policy measures must be strictly complied with."
TRADE AND EXCHANGE DEPARTMENT 09 46237804 09 46237802 E-mail address:ted@cenbank.org TED/FEM/FPC/GEN/01/003 January 20, 2014 TO: ALL AUTHORISED DEALERS AND GENERAL PUBLIC
Re: Fiscal Policy Measures For Automotive Industry
This is to inform all Authorised Dealers that the Federal Government has approved new Fiscal Policy Measures for the Automotive Industry with effect from October 9, 2013 as follows;
1. Motor Vehicles
All e-Forms 'M' and LCs must be established and the last shipment date evidenced by bills of lading dated on or before January 10, 2014.
(a) Fully Built Unit (FBU) Cars falling under H.S Code 87.03 shall attract a duty of 35% and 35% levy; (b) Fully Built Unit (FBU) Commercial Vehicles falling under H.S. Code 87.01,87.02,87.05,87.06,87.07,87.16 shall attract 35% duty without levy (c) Local Assembly Plants shall import their Completely Knocked Down (CKD) at 0% duty i.
ii.
Semi Knocked Down One (SKD) H.S. Code87.06 at 5% duty (d) Local Assembly Plants shall import Fully Built Unit (FBU) Cars at 35% duty and 20% duty for Commercial Vehicles without levy, respectively in numbers equal to twice their imported CKD/SKD Kits.
2. Tyre Industry
. BANK OR In order to revive the tyre industry, the following measures have been approved with effect from 9th October, 2013. Form `M' and Letter of Credit must be established and last shipment date evidenced by bills of lading dated on or before January 10, 2014.
Duty payable on tyres is now harmonized as below; (a) (i) (ii) Car tyres H.S. Code 4011.1000.00 20% duty and 5% VAT Lorry/Bus tyres H.S. Code 4011.2000.00 20% duty and 5% VAT.
(b) Importation of machinery and equipment for tyre production is now duty Free; (c) Pioneer status is hereby given to all tyre plants; and (d) Local tyre manufacturing plants are to import tyres at 5% duty in numbers equal to twice their production for two years from the date of commencement of production.
(a) To control under declaration of vehicles value to reduce duty paid; The Nigeria Customs Service (NCS) shall publish the price of new vehicles annually; and (b) To provide a transparent benchmark to determine the value of used vehicles the Nigeria Customs Service (NCS) shall use the value of a new vehicle depreciated by 10% per annum implying a ten (10) year period for cars and by 7% per annum implying a fifteen (15) year period for commercial vehicles. In either case, depreciation should never be below 30% of the the value of new vehicle equivalent.
To effectively combat smuggling, monitoring and control of used and grey vehicles imports, to also facilitate the resolution of consumer complaints, all vehicle dealers and importers for sale to the public shall be licensed by the National Automotive Council of Nigeria.
All Authorised Dealers are required to bring these fiscal policy measures to the attention of their customers for strict compliance.
Please ensure compliance accordingly.
TRADE AND EXCHANGE DEPARTMENT