Reduction in tariff on imported vehicles detrimental to the growth, development of local assembly plants – PAN Chairman

The Chairman of Peugeot Automobile Nigeria (PAN) Aliyu Wadada has described as shameful the level of growth of Nigeria’s automobile industry.

Wadada who spoke on Tuesday during an interview on Channels Television’s Sunrise Daily condemned government policies which he described as impeding the growth of the Nigerian automobile industry.

“The automobile sector in Nigeria should have gone way beyond where it is. It is shameful enough that we still haven’t gotten to manufacturing which is greatly about the environment that we operate in,” Wadada said.

He also reacted to the Finance Act 2020 and the reduction in the tariff on imported vehicles by the Minister of Finance, Budget, and National Planning, Zainab Ahmed.

“The Minister said initially there was 35% tariff and 35% levy which now all together makes 70%.

With the reduction in the Finance Act 2020, it now comes to 40% and she said 40% is good enough for the local assembly plants to thrive or develop because it gives a differential of 30%.

“That 30% has always been there even before this policy but it never attracted investors because it is not good enough for investors to be attracted.

“So that 40% differential is not good enough for local assembly plants to develop,” Wadada said.

He added that the reduction in the tariff on imported vehicles is detrimental to the growth and development of local assembly plants in the country and urged the Federal Government to make policies that will encourage the growth of local assembly plants.

“If the environment is made enabling enough for local assembly plants to proliferate, it means we will be able to stand the challenge,” Wadada added.

Speaking further on the Finance Act 2020, Wadada also pointed that the Finance Act is silent about import duties on SKD (Semi Knocked Down) vehicles.

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“None of the local plants do CKD (complete knocked down) vehicles all because of policy. The SKD that is being struggled upon is now going to be killed because the Finance Act on commercial vehicles is now being – is reducing the tariff from 35% TO 5% and the tariff on SKD (commercial) is 5%.

“The Finance Bill is silent about what SKD will pay on commercial vehicles today,” he said.

Wadada, therefore, said the Minister of Finance should come on air, “and tell us what happens to the SKD that have been imported and are on the high seas. When they come in, what is the tariff to be paid on them?

“Because the tariff of commercial vehicles is 10% before the introduction of Finance Act and the Finance Act is not even telling us anything about the tariff.”