Auto manufacturers now to get 10-year Tax waiver

Auto manufacturers now to get 10-year Tax waiver
June 14 15:58 2019 Print This Article

The Director-General, National Automotive Design and Development Council (NADDC), Jelani Aliyu, on Thursday said the Federal Government has given a 10-year pioneer tax waiver to local car manufacturers to promote local production and discourage importation.

He spoke during his visit to Katsina State Governor, Aminu Masari in Abuja, on the creation of Katsina automotive village with the help of NADDC. He said the waiver will help manufacturers setting up in the country to recuperate their huge investment as automotive plants are capital intensive.

He said: “We are giving a ten years holiday to stop the importation of used vehicles plus a 35 per cent levy and 35 per cent duty adding up to 70 per cent. But when they produce the vehicles in Nigeria it goes down to 10per cent or even 0 per cent so they can more easily cover their investment and be at an advantage.

“As soon as President Muhammadu 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 thousands of direct and indirect jobs.

“Nigeria spends not less than $8billion yearly to bring in cars from abroad; they bring in about 300,000 to 400,000 cars from abroad every year. On Nigerian roads we have about 11million vehicles and the breakup of those vehicles are cars, buses up to 6.7 commercial, government owns 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 between 10 and 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 industrialisation 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 per cent 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, with 140 vehicles production per year production dipping to zero.

Speaking, Governor 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.


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