The value of Sport Utility Vehicles (SUVs) importation by Nigerians has been cut by prevailing charges with regard to Import Adjustment Tax (IAT).

Findings by New Telegraph shows an estimated value of N463 billion ($280.7 million) for SUV importation in 2024 due to IAT levy of two per cent of the value of the vehicle.

The new tax regime stipulates that only imported vehicles of 2,000 (two litres) and 3,999 capacity (3.9 litres) engine would pay an additional charge, while vehicles with 4,000 capacity (four litres) and above engines would attract IAT of four per cent of their value.

Records also also revealed that due to the new tax and high exchange rate of N1,650/$1, importation of vehicles in the first six months of the year to Nigerian ports was N138.62 billion, leading to 60 per cent fall in vehicle shipments, when compared with 2023 imports.

According to the National Bureau of Statistics (NBS), majority of the vehicles valued at N1.063 trillion were shipped from America to the nation’s seaports.

This week, five roll-on Roll-off (RoRo) ships have arrived at the Ports and Terminal Multi-service Limited (PTML) and five Stars Logistics to offload 1,960 units. Of the imports, the Nigerian Ports Authority (NPA)’s shipping data revealed that 460 units of new vehicles were expected this week at Five Stars from Sunrise Ace, while Glovis Spirit will bring 350 units of used vehicles on Staturday.

Also, at PTML, it noted that Repubblica Del Brasile had discharged 350 units, while Grande Argentina and Grande Cotonou would berth this week with 400 units each. Despite the sharp drop in the importation of used vehicles, the shipping data stressed that 7,340 units of vehicles had berthed at the port’s terminals between August and December 2024.

In November, 1,470 units were imported through the Five Stars Logistics terminals as 1,200 units cleared at PTML from Great Lagos laden 500 units; Grande Luanda, 400 units and Grande Angola, 300 units. In October, the shipping data indicated that only 300 units of used vehicles were ferried to Five Stars Logistics by Glovis Champion.

Also at PTML, 1,100 units were ferried by Grande Cameroon with 350 units; Grande Lagos, 400 units and Grande Congo, 350 units in September.

In August, shipments of used vehicles into the ports was 2,150 units when six vehicles berthed at PTML, Five Stars Logistics and Greenview Development Nigerian Limited (GDNL) with 2,150 units, while 1,600 units of the vehicles were offloaded at PTML from Grande Cotonou with 500 units; Grande Benin, 350 units; Grande Angola, 350 units and Grande Lagos, 400 units, only 350 units were discharged at Five Stars by Grand Aurora and 200 units from Yangtze at GNDL.

Meanwhile, PTML has blamed 60 per cent drop in vehicle importation on high import duty and taxes on used vehicles in the first half of 2024. The General Manager of PTML, Mr Tunde Keshinro, explained that vehicle importation dropped from 45,000 units in the first half of 2023 to 18, 000 units received in the corresponding period this year.

According to him, the unprecedented decline in the volume of used vehicles importation into Nigeria could be located around high import duty and taxes for used vehicles, imposition of import levy on used vehicles, restriction of rebate on exfactory prices used for assessment of import duty to 10 years whereas the law allows importation of 12-year old vehicles.

He noted: “Vehicles above 10 years of age are forced to pay higher import duties, and high exchange rates resulting in excessive-high landing costs above the affordable level for the majority of Nigerians, who depend on private vehicles for private and commercial transportation.”

Recalled that the National Automotive Design and Development Council (NADDC), explained that Nigeria spends over $1 billion yearly importing spare parts.

The council’ Director General, Joseph Osanipin said during a training session for engineers at the Midas NFX software automotive design skills boot camp that the empowerment programme was organised by the council in Abuja to equip engineers with the skills necessary for manufacturing vehicle components.

He noted: “This massive expenditure underscores the urgent need for local production capabilities and advanced design training to reduce dependency on foreign imports and stimulate economic growth. This boot camp focused is on Midas NFX software training aimed at empowering local engineers and designers with the skills necessary to create highquality vehicle components.”

Osanipin said Midas NFX was a specialised tool that allows users to scan parts according to specific requirements and select the optimal materials needed for production, whether plastic or steel. He added that the council was planning to train 100 people yearly, including participants from the private sector.