BY MOSES AKAIGWE
Government’s plan to reduce the import duties and levies on buses, tractors and her motor vehicles as contained in the recent 2020 Finance Bill will be a disincentive to investments, in addition to setting Nigeria’s automotive industry back by at least 10 years.
This was the view expressed yesterday by the Chairman of Innoson Vehicle Manufacturing Company Limited {IVM}, Chief Innocent Chukwuma, while reacting to “the shocking decision” by the Federal Government, which he said would lead to the forced closure of many auto plants.
The Federal Executive Council {FEC} had on Wednesday, November 18,
approved a reduction in duties on tractors from 35 percent to 10; reduction of
duties on motor vehicles for the transportation of goods from 35 percent to 10
percent; reduction of levy on motor vehicles for the transportation of persons from
35 percent to 5 percent.
The downward review of duties and levies as well as the introduction of “tax
incentives” were intended by government to address the socio-economic problems
arising from the COVID-19 pandemic and the recent hikes in the pump price of
petrol and electricity tariff.
But, reacting to the news from his plant in Nnewi, Chief Chukwuma, argued that a
reduction in duties on imported vehicles would lead to massive importation of fully
built up vehicles, resulting in unfavourable competition that is likely to run the
Nigerian auto makers out of business.
He said the duty review is an embarrassing policy summersault considering that
the present charges on imported vehicles were prescribed by the Automotive
Policy {the National Automotive Industry Development Plan (NAIDP) to
discourage the influx of fully built up products while helping to boost production
by the domestic auto plants.
Chukwuma whose plant was officially commissioned in 2010, feared that the
reduction will erase the gains so far made in the industry since the Auto Policy