Import bill on used vehicles drops 83% to N138.62bn
Nigeria’s import bills on used vehicles, popularly known as tokumbo, fell by 83 percent year-on-year, YoY, to N138.62 billion in the first half of the year (H1’24) from N819.15 billion in H1’23.
Quarter-on-quarter, QoQ, breakdown of the National Bureau of Statistics, NBS, ‘Commodity Price Indices’ and Terms of Trade, ToT, report for the review period showed that in Q1’24, no used vehicle was imported compared to N69.23 billion worth of used vehicles that were imported in Q1’23.
In Q2’24, the value of imported used vehicles stood at N138.62 billion, representing an 81.5 percent decline YoY from N749.92 billion in Q2’23.
NBS noted that the used vehicles were imported mainly from the United States of America, stating: “On the other hand, total imports from America in Q2’24 stood at N971.84 billion.
Recall that last year, the federal government introduced a new set of taxes on imported vehicles, among other things.
The new tax regime stipulates that imported vehicles between 2000 capacity (2 litres) and 3999 capacity (3.9 litres) engine will pay an additional charge known as Import Adjustment Tax (IAT) levy of two percent of the value of the vehicle, while vehicles with 4000 capacity (4 litres) and above engines will attract IAT of four percent of their value.
The new levy is in addition to the 35 percent import duty and 35 percent levy being paid by importers of vehicles.
However, vehicles below 2000cc, mass transit buses, electric vehicles, and locally manufactured vehicles are exempted from the IAT levy.
The government also revised the import prohibition list with the inclusion of used motor vehicles above 12 years from the year of manufacture.
But in March this year, the Nigeria Customs Service (NCS) announced the suspension of the 25 percent import duty penalty on improperly imported vehicles.
