Review of 2020 Finance Act underway to boost auto sector – FG

The federal government is in the process of reviewing the 2020 Finance Act which places huge tax burden on indigenous vehicle assemblers. The review, according to the Director General of the National Automotive Design and Development Council (NADDC), Mr Jelani Aliyu, will remove the burden on local assemblers and boost their capacity to assemble vehicles […]

The federal government is in the process of reviewing the 2020 Finance Act which places huge tax burden on indigenous vehicle assemblers.

The review, according to the Director General of the National Automotive Design and Development Council (NADDC), Mr Jelani Aliyu, will remove the burden on local assemblers and boost their capacity to assemble vehicles for the use of Nigerians.

Speaking at the 16th Lagos Motor Fair, the DG, represented by the Director, Research, Design and Development, Mr Fidelis Achiv, assured that the review of the 2020 Finance Act would create incentives for the Original Equipment Manufacturers (OEMs) that had set up assembly plants in Nigeria.

Daily Trust further reports that the federal government, in the Finance Act 2020, reduced tariff on importation of Fully Built Vehicles (FBU) from 35 per cent to five per cent, while import duty for Semi Knocked Down (SKD) remains at 10 per cent.

The auto manufacturers said the 30 per cent reduction put investment in vehicle assembling at jeopardy, but conscious of the implications of the act, the federal government said a review was underway.

The DG said government was not unaware of the critical importance of the auto industry to the development of the economy and improvement of the Gross Domestic Product (GDP).

He said, “The council is in review of the policy, and also the Finance Act to ensure that the taxes are reviewed. And for one to boost volume is by ensuring that vehicles assembled by these OEMs (Original Equipment Manufacturers) are purchased.”

The Executive Secretary of the Nigerian Association of Road Transport Owners (NARTO), Mr Aloga Ogbogo, called on the federal government to establish a bank dedicated to the auto industry as it existed in agriculture and just like the Bank of Industry.