APGA flays tariff hike on imported vehicles, says it’s anti-Nigerian masses

Posted by News Express | 4 December 2013 | 3,605 times

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The All Progressives Grand Alliance (APGA) has condemned the Federal Government’s 250% tariff hike – from 20% to 70%, on imported used vehicles. “This Federal Government action contained in Gazette no. BD/FP/DO/09/189 is anti-Nigerian consumer, protectionist and high-handed,” the party said today in Abuja, the country’s capital.

According to APGA in a statement issued by its Publicity Bureau and made available to News Express by e-mail, “This policy only serves to deny the average Nigerian access to the affordable vehicle, and decrease means of effective transport and mobility within Nigeria. This blueprint also makes life harder for the itinerant, corporate and independently employed Nigerian who can barely eke out a daily living on their present salary/revenue structures, especially officers on Salary Scale 14 and below, without adding increased transport cost.

“These Nigerians are grateful for the availability and affordability of the imported used car – tokunbo, which comes in all prices, shapes and sizes, making it easily accessible for the up and coming Nigerian. The psychological impact and economic importance of owning or having the available car for any Nigerian, used or new, cannot be understated.”

APGA insisted that “imported used vehicles are not a luxury. They are rather essential commodities, which oil the engine of the Nigerian economy, as they conveniently serve to bring men and materiel to destinations where they are much needed.”

Continuing, the party said: “Average Nigerian customers are precise in their choice of vehicles. They often buy used but durable vehicles, which are of convenient use to the average Nigerian family and his business, and endure in the long term, though second-hand. This readily available transportation resource cannot be taken for granted.

“The average Nigerian imported car is a used Japanese/Asian brand, as manufactured by companies as Toyota, Honda, and Hyundai, amongst others. We will not forget the ever-present German/European models.

“The attraction to these brands is that they are cheaper at the source, affordable – with consumer friendly/negotiable conditions. They are also durable, have available parts, often with low maintenance costs. They serve to bridge the transportation and quality of life gap between the Nigerian rich and poor, without which the chasm arising will be a yawning divide. They make the up and coming Nigerian feel like they have a chance at the Nigerian dream. A ride.

“It is unfortunate that the only beneficiaries to the above plan are the Federal Government, which will rake in a lot of money from the taxes deriving from this policy, and the local Nigerian car manufacturing companies, who now have more leeway to operate and determine car supply and demand in the Nigerian car market. One wonders what will happen to our local car manufacturing industries without Government intervention. It is rather doubtful they will be competitive, as most of their primary raw materials are hardly sourced from Nigeria!”

APGA recalled that Nigeria has been “down this road before, with only a Government-induced inflation to show for it.”

The party opined that “protectionist high tariffs are not needed in a period of perceived economic progress, as present,” adding: “Though the local Nigerian car industry may be considered essential to the economy, the raised tariff to protect them negatively impacts our perception of the Federal Government for introducing an unnecessary money-making scheme, and the dire effect on the ordinary Nigerians who have to pay more for the affordable car.” 

APGA argued that though the base being taxed is rather narrow, the trickle down effects of such tariffs are negatively far reaching to the broad Nigerian populace in the short and long-run, as they have to spend more.

It noted that “at this holiday period, travelers will experience raised fares due to the trickle down effect from the increased price of the Nigerian vehicle. The head of the average travelling family has to determine the impact of raised transport fares for his family’s movement. So, also does the average trader for the transport of his goods.

“The considered impact of higher prices alters trader/consumer behaviour, which reverberates within the economy as opportunity costs ensue. Smuggling becomes the norm as car dealers begin to utilise neighbouring seaports where lower tariffs are the order of the day, denying our Government a once counted on revenue. Most domestic consumers due to higher fares emanating from a high car purchase, buy less. Retailers in turn, sell their available and new stock at a higher price, to make up for the higher taxes and an expected decrease in demand. The slippery-slope begins. The worst of all is where there may be a higher demand for the tariffed-vehicles due to a perceived Government attempt to phase out a durable product. Talk about Government induced inflation!”

The party suggested that to increase the viability of the Nigerian car industry, and ameliorate the suffering of the average Nigerian, Government should initiate a programme where at least 50% of the raw materials for the production of the Nigerian car are sourced, developed and produced in Nigeria.

“The Nigerian car Manufacturer should look to hire more workers with the windfall from any protectionist dividend. Nigerian car manufacturing industries should keep a record of their hiring practices, and how they’ve re-applied the dividend from the new policy to the benefit of labour and the marketplace by increasing their employment and production. This approach in the long run may increase rapid availability of the Nigerian car at dealerships, and may lower the price of the Nigerian manufactured vehicle. Government should also establish a quality and standards assurance program where the quality of the locally manufactured vehicle is at par with that taxed. To top all this, Government must ensure that the Nigerian end-product car is affordable,” the party said.

APGA emphasised the need for road reconstruction and maintenance, enabling a durable life span for existing vehicles, new and old. “We urge the Federal Government to reconsider its policy and revert to the old tariff system of 20%, which not only allows all a chance at ‘mobility’, but also gives the Nigerian populace an ease on life,” the party said.

It added that “transportation is not a luxury. It is a necessity. Government should invest in creating easier and affordable access for its citizens. Affordable vehicles increase recreation and quality of life for the citizenry. Our population and environment demand it.”

•Photo shows APGA National Chairman, Sir Victor Umeh.

Source: News Express

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