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Ali, Customs boss

Why Customs advised FG to order publication of ex-factory price of vehicles

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More facts have emerged as to why the Presidency Wednesday ordered auto dealers to effective January 1, 2017 publish the ex-factory price of all their vehicles on display.

A top official of Nigerian Customs Service (NCS) in Ikeja Federal Operations Unit told Business Hilights that “the idea came from Customs because many auto importers collude with some corrupt officials and other agencies to defraud the nation by over declaring the factory price in other to escape duties”.

The Comptroller General of Customs, Col Hammed Ali (rtd), had advised the presidency to effect the policy from 4th quarter but in the wisdom of the presidency, it pushed it to early next year.

Ex-factory price is the exact amount a manufacturer charges for the products as they leave the production line. The ex-factory figure is determined solely by the manufacturer. The price does not include taxes, surcharges or shipping and handling fees.

He accused auto dealers of allegedly depriving the Federal Government of revenue and frustrating ongoing fight against corruption in the sector by playing pranks with the ex-factory price.

According to the senior Customs official, majority of auto dealers in Nigeria, those big companies don’t pay the required revenue and taxes. The Government will crack down on them as from 2017.

He said it is because all of them in unison decided to be doing that, that is why the ex-factory price not readily available, thus creating a scenario of no uniform price for same product and quality even when the dealers are in same place.

He said in some cases, the difference is as much as 200 or 300 per cent and the government is losing much in revenue.

We also believe that the inflated costs which in some cases are more than 300 per cent higher than the market costs are proceeds of corruption. Once we get the ex-factory price as from next year (2017), the Government will confront the dealers especially in the area of Customs levy, taxes and market price.

We can get the ex-factory price from manufacturers. But, we expect the dealers to provide the information. Any dealer who refuses to comply with the presidential directive will be sanctioned.

Another regulation coming with the ex-factory price is that importers and owners of imported used vehicles are expected to make available road worthiness certificates from their country of origin.

Security agencies such as the Police and officials of the Federal Road Safety Corps (FRSC) are expected to enforce the directives in 2017.

It would be recalled that the NCS had on Monday placed a ban on the importation of vehicles through the nation’s land borders. The development encouraged dealers to call on the government to complement the ban with reducing the duty payable on imported cars which currently stood at 70 per cent of the value of the car, a development that have pushed car import business to neighbouring countries where such regulation does not exist.


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