HomeBusiness Tokunbo age limit extension not a big deal...
Tokunbo age limit extension not a big deal...
Written by Ifeyinwa Obi
Saturday, 04 October 2008
As dealers prefer lower tariff
Tokunbo car dealers, the recent increment on the age limit of car imports to 10 years may after all not provide the long awaited solution for more affordable cars in the country and therefore not a big deal.
Tokumba Caes
The importers even preferred a reduction of import duty on these used cars, so that the prices would be affordable to low-income Nigerians .
The age limit from date of manufacture for car imports had for several years been fixed at eight years, up from the earlier five years limit for all vehicular imports. While age limit had been scrapped for tokunbo buses, vans and trucks, when the age limit was raised from five years to eight, this had subsisted for cars until the recent announcement of tariff regime that kept the new age limit at ten years.
However, stakeholders in the industry who spoke to Saturday Vanguard, say the new policy may not achieve the aims of the Federal Government. It could be recalled that on announcement, the Comptroller General of the Nigerian Custom Service Hammeed Bello Ahmed had said that the new development was basically aimed at facilitating trade, alleviate the suffering of the people and contribute to industrial growth as it is simple and easy to administer.
He also added that “it is also hoped that it will lead to improvement in tariff, revenue generation in the long run because of better compliance possibilities”.
Reacting to the Federal Government’s new policy, the chairman Progress Car Park at Berger Yard, Apapa, Chief Julius Ubaneche said that the new policy was not what the industry needed. For him,“we the car dealers do not need extension in car age and I don’t think that is what the masses need. What actually brings the high price in car sale is the tariff we pay on the cars. What will alleviate the suffering of the masses is keeping the prices of the cars low.
“The tariff hurts us more and the government should look at that direction. We have in many occasions made it clear even when the Customs sometimes approach us on the issue of smuggling, we told them that if the tariff paid on the cars are reduced, nobody would want to smuggle cars into the country.
Extension of the car age would not in any way reduce smuggling activities, because we are all business men, we buy these cars to sell. If the duty paid on the cars are high despite the year, the cost is still going to be high in the market. Nobody would want to sell below cost price or sell without making profit, unless the person wants to go out of business”.
Ubaneche also commented on their expectations on the 2008-2012 tariff book ammended to be carried out by the Nigerian Customs, saying that “what we actually expected during the 2008-2012 Nigerian Customs and Excise tariff book amendment was that, the tariff on Tokunbor cars should be amended, to make the cars affordable. I don’t see how this recent extension would help in making the cars cheaper in the market and that would not in anyway benefit the masses”.
He also painted the picture of what would happen if only new car dealers continue to get tax holidays and the tokunbor dealers only extension of age limits. “Take for instance, the new cars dealers now give out cars and ask their customers to pay within four years. This is because, they get some deduction in the tariff. They don’t pay as much as we do. No tokunbor car dealer would give out his car on credit, and I am telling you the tariff is running us all out of business.
The cars are very expensive and people are not coming to buy. Our customers do not understand, they take it to be our fault, but the fact remains that the federal government are not putting policies that would help the masses, we prefer tariff amendment”, he insisted.
Yet Ubaneche was not alone. The manager of Progress Motors Ltd, Chief Emmanuel Ibenye also corroborated him, saying that the government should seek the opinion of the stakeholders in the industry before making policies, if the such policies are really meant for the benefit of the masses. We have never objected to the age limit of cars that should be imported into the country.
We have always kept to the eight years that was previously there. Nobody would love to bring in scrap into the country, the problem is the high tariff that are being collected on these cars. We all know the truth, if the prices of cars in the market must be affordable, then the duty should be considerably low. I don’t get it when people are made to suffer because duties should be collected on goods by the government.
This does not however, mean that duties should be scraped off, but let the government be considerate, they are supposed to be for the people and not against the people or subject the people to total suffering. Let affordable tariff be placed on these cars so that many Nigerians can afford a tokunbor car at least.
“If most Nigerians can not afford to buy tokunbor cars, then the government is not living up to its responsibilities, that’s the way I see it” he added.
Also sharing his own view, another car dealer at tokunbor car market at Berger Yard, Mr Obinna Ogbue, said the government would get no kudos for age limit extension. “The extension of the age limit has made no impact and would not.
This policy would not reduce the car price, instead it would only make the government make more revenues on cars, but the question we would ask ourselves is this, how has that affected the common man on the street. Any policy made and it does not take care of the peoples’ welfare does not worth it. What I had thought the government would do was to reduce the tariff on tokunbor cars and other goods, which have been the cries of the people, and not extension of car age limit”.
Ogbue said the extension did not make him and other dealers happy because it would neither add colour to business nor benefit the masses. “What we want is anything that would bring reduction in price of cars and make them affordable in the market. The smuggled cars are not overaged cars. I am very sure of what I am telling you. Go to the customs warehouse where the seized cars are kept you would see they are all even below the age limit.
People engage in smuggling to dodge the tariff. When one calculates how much he is going to pay as a duty for the cars, particularly when they are many, in addition to the purchasing cost, I bet you, most times it is very difficult to sell. In most cases we sell below cost prize and it is running us out of business. Most people here use this business to cater for their families, now tell me what will become of such families if business that sustains them collapses.
These are the things government should consider in making their policies and the earlier they began to think more of the welfare of the masses, the better for all of us” he said.
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