The senator representing Bauchi South Senatorial District, Ali Wakili, has pledged to champion the reversal of the federal government automobile policy that led to increment in tariff on imported second-hand (also called tokunbo) vehicles.
The Jonathan administration introduced the Nigeria Automotive Industry Development Plan in 2013 to ensure increased local manufacture of vehicles and limit importation of tokunbo cars by raising tariff on them to as high as 70 per cent of vehicle cost.
The policy generated mixed reactions with commercial road transporters and some businesses questioning the policy while the government defended it; saying in 2014 that the implementation was already working positively for the country as some vehicle manufacturers had either started or stated their intentions to start assembling vehicles in the country.
The new administration of President Muhammadu Buhari has not stated any policy direction on automobiles, as well as others, as Nigerians await the president to appoint his ministers.However, Mr. Wakili said the hike in tariff on the second-hand cars may not only deny the country the needed revenue, but also emasculate the middle class.
The lawmaker, who is a retired Comptroller of the Nigeria Customs Service, NCS, said “The new customs tariff on cars need to be reviewed downward because we need to re-establish the middle class in Nigeria,” he said.
Mr. Wakili, a first-time federal legislator, also called for a review of most of the laws being operated by the NCS, arguing that such laws are no longer in tune with modern economic realities.
He said he hopes to advance legislation that will better the operation of the customs and also help to re-establish the literally extinct middle class.
“The relativity on items often affects the implementation. No body wants to pay high taxes, because the higher the tax, the higher the potential of smugglers to indulge in smuggling”, he said.
“As a former Area Comptroller of Seme border, I have argued that the hiking of tariff on items does not help us. It takes away our attention from the anti-smuggling activities; we dissipate energy on running on one or two smugglers with the attendant risk of life on the smugglers and on our own personnel.”
“Government should know that the average citizen cannot afford to buy a new car, whether it is being produced by only PAN or other manufacturers; rather they would want to buy used cars.
If they must buy second-hand cars, then we ought to encourage them to take the normal routes, charge them medium rates that they can afford to pay, and no one would want to take the tortuous smuggling routes.
“If you are coming from the developed countries where you don’t need to have a car; where you can jump into the next train or pick a bus that is efficient and timely, you can afford to do without a car of your own.
“But as long as the public transportation system is faulty, and people cannot afford to buy new cars, they would rely on used cars and if you are exerting so much pressure on them in trying to own these so called tokunbo cars, they will circumvent the law.
“It will cost you so much man-hour, because you cannot be able to control them. There are so many porous borders; once you try to block one, many others are created the next day; because of the leaky nature of our border system – from the bite of Badagry up to Bayelsa, you can always have a place to enter this country.
“Even if you are using modern communication technologies, or air-to-ground patrol of the borders, you cannot be able beat the potential smugglers at the various routes they use at a time. So the new customs tariff on cars need to be reviewed downward because we need to re-establish the middle class in Nigeria.”
The senator also spoke on how to better the laws of the customs service to achieve the desired optimal revenue generation for the country.
“Legislation can help better the Nigeria Customs,” he said. “If we look into the existing extant laws most of them are out of tune with realities.
“In Nigeria there has been efforts to reform the Customs law…I am not sure if the National Assembly has been able to pass it or if the government has been able to assent to it. But what I know is that in trying to reform the Custom we have to factor in the current challenges facing us globally.”
“We are dealing with an era of information communication and globalization, the issue of the world becoming global village; the issue of being able to smuggle something bulky and be caught at the borders is gradually becoming history, because now commodities can easily be smuggled through the borders via a micro chip that can be carried in the pocket. Such item carried in a microchip and sneaked through the borders may have been a greater source of revenue to the government if properly checked and tariffed at the borders. Today we talk of violent crimes, proliferation of arms and porous borders and so on.
The lawmaker also spoke of the peculiarities of policing the Nigerian border.“When you come to Nigeria where we are dealing with a vast stretch of fallow land; where we are dealing with people of different neighbouring countries that share common identities, common language, common religion and culture which you cannot even draw a clear line between the two countries and other things; it has to take more than legislation to deal with such border problems bedevilling us as a country,” he said.
Mr. Wakili also spoke about some of his suggestions for managing smuggling of products via Nigeria’s porous borders.
“Do you have to create international markets where some of these communities at the borders who create economic and revenue encumbrances in terms of movement of goods and services are properly managed?
“Do you have to ensure you still collect revenue that would have wasted a great part of your time on anti-smuggling activities? Because the one person from the other side of the neighbouring countries does not know that he is committing a crime because he feels he is visiting his relation on the other side of the unclear border; and such a person can also say he is going to a market on the other side.
“We need to have an integrated border control systems that will involve all security forces; we should be able to have regional centres for border control,” he said.
The Bauchi-based legislator said Nigeria would need to coordinate legislation with neighbouring countries like Benin, Niger, and Chad to solve its smuggling problem.
“I have said it that the bane of our development in Nigeria is that our fiscal policies differ with that of our neighbouring states,” he said. “I have said that there are situation where things on which we have to pay duties in Nigeria are duty free in our neighbouring countries; we have things that are not supposed to be imported into Nigeria, yet are importable in our neighbouring countries, and they still find their way into our country because they have ready made market there which Nigerians can just walk across the borders to go and buy.”
“The issue of this ECOWAS trade liberalization (ETL) scheme – especially the compensation scheme just have to be reviewed because the union states are compelled to open their borders for goods from neighbouring countries to come in. The fact that they are coming in duty-free, we loose revenue. The member states found it feasible that there has to be a compensation scheme; that is why if you go to make importation, you just pay ETL levy of 0.5 percent. I don’t know now or if it has been reviewed upward, because not more than five weeks ago I have read it in the papers that they have launched the new ECOWAS tariff. So if we have to deal with such issues, member states will have to sit down and the workings of the various agencies also have to be streamlined.
“And coming back home, all the agencies of states must see themselves as agencies states, not each an everyone trying to be above each other in terms of price that this is my service and that is your force and so on. So at the borders, if we look at what is happening at the Mexican border or the francophone countries, you will notice that it is only from their berets or their insignia you will know that this is a Duane, this is a Gendarmerie or this is a soldier, all working towards the interest of their countries.
“I believe if we have an integrated approach in terms of managing the borders we will achieve greater revenue for the country. Unfortunately, we even have a border management agency that is in comatose since its enactment,” he said.