Nigeria grants tax waiver to vehicle firms

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Nigeria has granted incentive of ten years pioneer tax waiver to local car manufacturers to promote local production.

The Director General, National Automotive Design and Development Council, NADDC, Mr  Jelani Aliyu, said the waiver would discourage importation of cars.

Jelani said this during a visit to the governor of Katsina State, Aminu Masari in Abuja.

He visited the governor to discuss the creation of Katsina automotive village with the help of NADDC.

The Director General stated that the waiver was to help manufacturers in setting up to recuperate their huge investment as automotive investments require millions of dollars to set up a plant.

 “We are giving a ten years holiday to stop the importation of used vehicles plus a 35% levy and 35% duty adding up to 70%.

“But when they produce the vehicles in Nigeria it goes down to 10% or even 0% so they can more easily cover their investment and be at an advantage.

“As soon as President Mohommedu Buhari signs the auto policy into law, I can assure Nigerians that big companies like Volkswagen and others that we signed Memorandum of Understanding MOU with in 2018 will come to the country and invest again.

“With the diversification of the country from oil to non-oil, the automotive sector plays a very strong role, it has the capability to provide thousand of direct and indirect jobs.

“Nigeria spends not less than $8 billion yearly to bring in cars; they bring in about 300,000 to 400,000 cars from abroad every year.’’

On Nigerian roads we have about 11 million vehicles and the breakup of those vehicles are cars, buses up to 6.7 commercial, government owes about 1,35000, including diplomats all add to 11.5million vehicles on Nigerian roads.

“Most of these vehicles brought into Nigeria are old, some are 10-20 years old. again all these monies leaving Nigerian shores are actually fuelling jobs abroad while we continue to have high unemployment rate in the country, not to say that all these monies going out and vehicles coming in are not contributing anything to the industrialization of Nigeria.

“Years back, we had Peugeot and Volkswagen producing vehicles, by 1980 we had three commercial vehicle plants, Styr, Anamco and Leyland and together we were producing 140,000 new vehicles.

Peugeot assembly in Kaduna had up to 40% local content, 40% of the components of Peugeot were actually made in Nigeria at that time.

After the drop in the price of crude oil in 1986 from $27 to $10 it completely wiped out the economy and the automobile sector was not spared, from 140 vehicles production per year production came down to zero.

Masari said it will be a welcome development for the state to partner NADDC on the creation of proper automotive village in the state, asserting that there should be a difference between a mechanic village and the automotive village.

This initiative will take a lot of youths off the streets, give the youths a sense of direction as more will acquire more skills through this initiative.