Import Bill on Tokunbo Vehicles Declines as FG Introduces New Taxes
- Nigeria’s import bill on used vehicles declined by 83.% to N138.62 billion in 2024
- Data from the NBS shows that Nigerians did not import used vehicles in the first quarter of 2024
- The breakdown states that Nigerians imported used vehicles mainly from the United States of America
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Nigeria’s import bill on imported used vehicles, known as tokunbo cars, dropped by 83% yearly to N138.62 billion in the first half of 2024 from N819.15 billion in the same period in 2023.
The quarterly breakdown by the National Bureau of Statistics shows that in the first quarter of 2024, the country did not witness the importation of used vehicles, compared to N69.23 billion used on imported cars in the same period last year.
Source: UGC
Nigerians import cars mainly from the US
In the second quarter of 2024, the value of imported vehicles stood at N138.62 billion, representing an 81.5% annual decline from N749.92 billion in Q2 2023.
The NBS disclosed that used vehicles were imported mainly from the US, stating that total imports from America in Q2 2024 stood at N971.84 billion.
Last year, the Nigerian government introduced new taxes on imported vehicles.
The new tax rule specifies that imported vehicles with engines between 2000 capacity or two lites and 3,999 capacity will pay an additional charge known as an Import Adjustment Tax (IAT) levy of two per cent of the vehicle's value, while cars with engines 4,000 capacity and above will attract a levy of four percent of their value.
FG introduces new taxes on imported vehicles
The new levy is in addition to the 35% import duty and 35% levy paid by vehicle importers.
Vanguard reports that vehicles below 2000c, mass transit buses, electric vehicles, and locally made vehicles are exempted from the IAT levy.
The Nigerian government also revised the import prohibition list, which now includes used vehicles older than 12 years from the year of manufacture.
However, in March this year, the Nigeria Customs Service (NCS) suspended the 25% import duty penalty on improperly imported vehicles.
Prices of imported cars change as Customs FX rate
Legit.ng earlier reported that importers of used vehicles across Nigeria had adjusted their prices following the volatile exchange rates in the country and the incessant adjustments of FX for cargo clearance by the Nigeria Customs Service (NCS).
Since February 2024, the NCS has adjusted exchange rates more than six times, with some happening within 24 hours.
Importers say the adjustments cause fluctuations in the prices of imported vehicles and make imports uncertain as they are unsure of the next move by the customs.
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Source: Legit.ng
