By Cosmas Uwakwe

ANGRY reactions to the recent nationwide raids of the premises of auto dealers by members of the Comptroller-General of the Nigeria Customs Service’s strike force could not have come as a surprise given its grave economic implications. In fact, the subsequent closure of these vehicles marts has since continued to generate ripples in many quarters bordering on condemnation.

Indeed many were certainly taken aback when on September 29, the strike force assisted by officers attached to the Federal Operations, FOU, Zone A, Ikeja, stormed the popular Berger auto market along the Oshodi-Apapa Expressway “based on credible information that there were smuggled vehicles in these car marts”, according to the Customs Public Relations Officer, Joseph Attah.

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The crackdown on auto dealerships which began in Lagos soon moved to Ibadan and other cities in the South-West states and was subsequently extended to include the Federal Capital Territory, FCT, and other states in the North, including Kaduna, Kano, Ilorin, Sokoto and Kebbi. At the last count, no fewer than 110 car shops were sealed and will remain so until the owners pay the over N2 billion purportedly owed the Federal Government in Customs duties.

It is understood that similar raids were carried out in 2017 on the orders of the Comptroller General of Customs, CGC, Col. Hameed Ali (retd). The raids commenced following the expiration of a six-week ultimatum given auto dealers nationwide to clear all vehicles deemed to have been smuggled into the country. The raids led to the seizure of 646 vehicles which reportedly fetched the Federal GovernmentN272 million in the first quarter of 2018. Customs officials explain that the recent offensive on auto dealerships was obviously a fallout of the closure of Nigeria’s borders. In other words, the action was part of the anti-smuggling campaigns aimed at ensuring compliance with import guidelines; hence the explanation by FOU Zone B Comptroller, Mustafa Sarkin-Kebbi, that the extant laws empowered the Customs operatives to enter any building suspected to have smuggled items. Sarkin-Kebbi added: “Duty evasion which robs government of revenue will not be condoned under our watch because our Comptroller-General has declared zero tolerance for such unlawful act. It is, no doubt, economic sabotage and will not be allowed to stand”.

But obviously rattled by the public outrage that greeted the Customs raid in Lagos on September 29, Customs PRO, Attah, had quickly explained that the sealing of auto marts was just temporary, adding:  “As from this week we will assess the situation and advise them accordingly as to what they should do.” But subsequent events have since put a lie to this explanation as the long wait for official clarification continues.

In the first place, contrary to the claim that the sealing of the auto marts was temporary, more than four weeks after, the premises of these companies have remained shut. But more disturbing is what has emerged as the questionable system of documentation and two regimes of duties employed by Customs in its dealings with automobile dealers. It is a development Ademola Moshood, Secretary of Automobile Association said creates “a fertile  environment for corruption to thrive within its fold to the distress of buyers of new vehicles in the country”.

According to him: “The Customs Service’s Duties system is whimsical because it is not based on any known indices and certainly not based on the World Trade Oganisation’s, which applies only duties determined as Freight on Board, FOB. This means the amount the manufacturer sold the product to the Nigerian or any other country’s importer, less the cost of shipment/transportation.

“This cost, recognised as FOB, is universal to every buyer of goods from the same manufacturer and so could be calculated for the sake of local duties in the destination country; for instance, Nigeria or Ghana. If the cost of FOB is different, then it must be on account of accessories in the vehicles and these can be calculated to arrive at the final costs on which FOB/Duties are based”.

The argument of the auto dealers  is that the cost of freight is usually determined by charges from the country of origin of the product to its destination.  According to Moshood, there would be different freight costs for vehicles shipped to Nigeria from Dubai, which usually handles the Middle East and Africa markets and for those coming into Nigeria from South Africa, which is responsible for sub-Saharan Africa markets.                        In spite of that, he said the FOB for the same products from either Dubai or South Africa remains the same, just as the duties. Ghana, Nigeria’s neighbour, uses the same universal system, with dealers employing the FOB, which is online, to calculate their duties; importers and buyers of new vehicles pay their duties online to their Customs Service to the benefit of all parties. The payment of this duty can be verified at the swipe of a card by whoever cares to know and will eliminate the setting up of road blocks by Customs.

Currently local motor dealerships pay their duties based on the approved FOB from the manufacturers. It is an arrangement the Customs are aware of and could verify from the embassies or high commissions of the relevant countries. But this obviously is not the case because after the dealerships get Customs clearance of their vehicles at the ports using the approved duties, unsuspecting buyers are ambushed on the highways by Customs officials who brandish the so-called ‘National Valuation Database for Imported Vehicles that ordinarily should not be in use since it is illegal.

All who have had to go through this ordeal usually tell of their harrowing experience. More confounding is that on October 9, 2019, the Nigeria Customs Service Tariff and Trade, Valuation Unit informed of the revocation of all approved price lists. That is, the approved FOB prices issued to companies had been revoked indefinitely.

This represents a clear flaw in the way the system operates presently. In other words, there must be a level playing ground for duty payment based on FOB as universally applicable. That is, importers of a particular item must pay the same duty and this information should be made public and put online for the sake of transparency.