Used vehicles import bills surge 375% to N803.4 billion

Used vehicle import bills surge 375% to N803.4 billion
Used vehicle import bills surge 375% to N803.4 billion

Data released by the National Bureau of Statistics (NBS) has revealed a significant spike in import bills on used vehicles, particularly those equipped with diesel or semi-diesel engines and with a cylinder capacity of less than 2.5 liters.

In the first half of 2023 (H1’23), these import expenses soared by an astounding 375 percent, reaching a total of N803.4 billion.

This marks a substantial increase from N169.1 billion reported during the corresponding period in 2022 (H1’22).

The NBS Foreign Trade in Goods Statistics further disclosed that import bills on used vehicles experienced a staggering quarter-on-quarter (QoQ) surge of 956 percent during the second quarter of 2023 (Q2’23).

These expenses climbed to N733.9 billion in Q2’23 from N69.49 billion in the preceding quarter, Q1’23.

Motorcycle import expenditures dip 19% in Q2’23

Conversely, the data also highlighted a 43 percent year-on-year (YoY) decrease in import bills associated with motorcycles, with figures dropping to N69.85 billion in H1’23 from N122.39 billion in H1’22.

Import bills for motorcycles saw a 19 percent QoQ decline, with expenditures slipping to N31.3 billion in Q2’23 from N38.6 billion in Q1’23.

Notably, in April of the previous year, the Nigeria Customs Service (NCS) had announced a reduction in import duty for both new and used imported vehicles, decreasing the rate from 35 percent to 20 percent.

However, in April 2023, the federal government introduced a new set of taxes on imported vehicles through the Federal Ministry of Finance, Budget, and National Planning.

The tax law, which came into effect on June 1st, 2023, introduced the Import Adjustment Tax (IAT) for imported vehicles with engine sizes ranging from 2.0 liters to 3.9 liters, with a 2 percent levy based on the vehicle’s value.

This additional tax was implemented alongside the existing 35 percent import duty and 35 percent levy applied to car imports.

In July 2023, Mr. Dele Alake, Special Adviser to the President on Special Duties, Communication, and Strategy, announced the federal government’s suspension of the Import Adjustment Tax (IAT) on specific vehicles.