July 25, 2024


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Disturbed by the complaints of freight forwarders, importers and even officials of the Nigeria Customs Service (NCS) on the challenges of and workability of the newly introduced VIN-valuation (vehicle duty assessment) regime, MAJAN decided to invite stakeholders for a brainstorming session. The forum provided an avenue to understand the workings, challenges and the implications of the policy on the nation and its economy. It also proffered solutions to the numerous observed challenges.

In attendance were representatives of the National Association of Government Approved Freight Forwarders (NAGAFF), Association of Nigerian Licensed Customs Agents (ANLCA), African Association of Professional Freight Forwarders and Logistics in Nigeria (APFFLON), National Council of Managing Directors of Licensed Customs Agents (NCMDLCA) and maritime journalists.

1. Participants were united in their displeasure that the policy was hurriedly carried out by the Nigeria Customs Service (NCS) without the statutory 90 days notice given to stakeholders before new policies are introduced in the system.

2. That the NCS failed to keep to the earlier advertised assurance of a test-run of the policy in one port before making it universal. As a result, there was no room for the fine-tuning of noticed hitches.

3. That the major problem with VIN-valuation is the clearance of non-standard vehicles, that is those vehicles whose data and history are not captured in Customs valuation portal. As a result, owners of such vehicles or their agents are compelled to interface with Customs officers, many of whom are using such opportunity to exploit them. For standard vehicles, those with 17 digit numbers, though the duty is still viewed a bit high but their clearance can be rated with 90% pass mark.

4. It was however disclosed that some of the standard automobiles like Mercedes, M Class, some brands of Toyota, BMW and Lexus with 17 digits, are still not captured in the VIN-valuation portal. This has resulted in their clearance being a subject of negotiation between importers and Customs officials resulting to abuses and compromises.

5. That there is no data base or chart for both standard VIN and non-Standard, a development that does not help freight forwarders or importers to plan ahead for the clearance of vehicles.

6. Participants noted with concern the huge valuation disparity between vehicles from Asia and those from America.

7. The forum noted with concern the reduction of age limit of imported vehicles to 9 years instead of the 12 years Customs canvassed during stakeholders’ sensitization meetings.

8. That the NCS has said it is not ready to go back to the drawing board to fine-tune the system, is a cause for worry as the anomalies are forcing everybody to lose out.

9. Due to the confusion in the system, a lot of delays is encountered by vehicle owners with the attendant demurrage charges which have made clearing costs so high that these automobiles are now abandoned in the ports by their owners.

10. So far there has been no reprieve from any quarter as to assuaging the accumulated demurrage encountered by importers for a problem not caused by them.

11. Consequently, while the terminals are congested with abandoned vehicles, no revenue accruing to their operators; Customs is losing revenue as output is on a downward journey.

12. Participants expressed worries that the NSC has failed in factoring the yearly 10% depreciation value of vehicles into VIN-valuation System, the outcome of which is the present humongous cost of clearing.

13. Freight forwarders frowned at the abysmal performance of V-REG, which office is far removed from its operational base, with no verifiable address. Again, the company’s irregular network makes it difficult for people to make requisite payments with the consequent delays.

While the stakeholders affirmed that uniformity is desired in the clearance of vehicles and have welcomed the VIN-valuation system, they recommend the following as the way forward:

1. NCS should not sacrifice trade facilitation on the altars of revenue generation, a development blamed for the hasty introduction of a policy it was ill-prepared for.

2. Comptroller Kunle Oloyode, the Customs Area Controller (CAC), was given kudos for the Code system he introduced in the clearance of non-standard vehicles. With the system, popped up codes are uploaded to his direct portal for immediate response without physical contact. Others have been advised to emulate him.

3. The NCS is called upon to go back to the drawing board to harmonise its operations to ensure that the non-standard vehicles are accommodated in the valuation portal

4. NCS should provide valuation chart and data for all categories of vehicles as a guide for all and sundry to prevent anybody shortchanging the system.

5. Customs should make every effort to accommodate every vehicle into its port.

6. In the interim, the NCS should operate both the VIN-valuation and manual systems side by side until everything is harmonized for a seamless operation.

7. The NCS should stick to the 12 years age limit for vehicles it had canvassed before the introduction of the scheme instead of the 9 years presently obtainable. A situation where the duty of ordinary automobiles such as Gulf, Toyota Corolla and Martix has gone up from N300,000 to N500,000 it used to be, to N1.0 million to N1.3 million is unacceptable as it has made vehicles unaffordable for ordinary Nigerians.

8. Vehicle Registration (V-REG) firm is advised to make itself accessible and put its house in order by upgrading its system to meet the required needs of customers.

9.Henceforth, government should ensure that only career Customs officers are appointed as Comptrollers General of the NCS. This is to avoid unnecessary trade bottlenecks in the system which well grounded career officers would not infuse into the system.

Communiqué signed by:

Jerry Aguigbo
Udeme Clement Chairman, TPP Media Chapel, NUJ
Ray Ugochukwu
MAJAN President

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