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Nigeria Hikes Import Duties On Motor Vehicles

by Lorys Charalambous, Tax-News.com, Cyprus

28 November 2013


To encourage local vehicle manufacture and assembly in Nigeria as part of a new national automotive plan, Minister of Finance Ngozi Okonjo-Iweala has issued a document which gives details of the increases to the duties on imports of vehicles, and on tire imports, from 2014.

The import of fully-assembled new cars will therefore suffer a substantial hike in taxes to 70 percent of the vehicle's cost – an import duty of 35 percent and an additional levy of another 35 percent. The present duty and levy are 20 percent and 2 percent, respectively.

Fully-assembled commercial vehicles, on which there has been a 10 percent duty, will pay the same rate of 35 percent, but without an added levy.

On the other hand, the document specifies that local assembly plants will be able to import completely knocked-down vehicles free of import duty; and semi-knocked down vehicles at a 5 per cent duty. The import of fully-assembled cars and commercial vehicles subject to higher duties (but no levy) will be restricted in numbers.

With the Government also looking to tempt tire manufacturers back into Nigeria, the import duty on tires for cars, buses and lorries will also be hiked at the same time, from 5 percent to 20 per cent, with an added 5 percent value added tax. However, local tire manufacturers will still be able to import a restricted number of tires at the previous 5 per cent duty for two years after they start production.

TAGS: Finance | tax | business | Niger | Nigeria | tariffs | excise duty | ministry of finance | manufacturing | import duty | trade

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