CUSTOMS agents, freight forwarders and car dealers have expressed their worries on the Vehicle Identification Number (VIN) Valuation System introduced by the Nigerian Customs Service (NCS) on imported vehicles.
The VIN-valuation is an artificial intelligence system that uses generated data to allocate a monetary value (tariff duty) based on historical data aggregated from what was initially captured into the NCS system as the appropriate value for a vehicle.
At a stakeholders meeting called by the Nigeria Customs Service (NCS) on Tuesday in Lagos, the customs agents, freight forwarders and car dealers threatened to go on strike action if the issue was not resolved.
Some of the stakeholders who spoke to The ICIR on the sideline of the event said NCS officials refused to acknowledge the problem of devaluation confronting them and lamented the consequential loss of income.
The meeting ended in a stalemate, without any logical step taken.
Clearing agents had last week embarked on a three-day protest against the VIN valuation system, labelling the policy “fraudulent.”
Over 8,000 vehicles were understood to have been trapped at the seaports during the protest, as freight forwarders blocked the Tin Can Port gate. It was learnt that Customs officers at the Tin Can command were not allowed to access their offices.
The mass action attracted other stakeholders, as car dealers in Lagos shut their auto showrooms in support, following a directive by the Lagos State Motor Dealers Association.
The Chairperson of the Association of National Licensed Customs Agents (ANLCA), Tin Can chapter, Ojo Peter Akintoye, giving an illustration on how the VIN valuation works, explained that if he purchased a car for $5,000 and shipped it with $1,250, it is $6,250 in total. Akintoye noted that the Customs law recognizes what is known as transaction value.
The problem, however, according to him, is that when he brings it before the Customs for valuation, he is given a valuation of $13,800, which is much different from what he shipped.
“What the law says is that my $6,250 should be exchanged to naira to give me cost, insurance and freight (CIF). If that is done, we will change it to naira, then 35 per cent of the money in naira is what I am supposed to pay the Nigerian Customs Service. But in a situation when you take it to $13,800 dollars, how is that a uniform figure?” he wondered.
Akintoye lamented that the amount used to clear a car in Apapa, Tin Can and Port and Terminal Multiservices Ltd (PTML) ports is different. He argued that global practices mean automating the system, not forcing agents to sell a used car at an original car price.
He stressed that the NCS did not consult the stakeholders while instituting the VIN system and vowed they would resume the no-work protest if none of their grievances was addressed.
A spokesperson of the Lagos State Motor Dealers Association, Alhaji Lateef Animashaun alleged that Nigerian Customs officials were not operating according to best practices. Animashaun urged the NCS to give dealers a grace period of 90 days for the process to be fine tuned.
He said, “The best practice all over the world is that no matter the circumstances, the cost of clearing comes down. But in Nigeria, the cost of clearing increases. All of these happen because we are at the whims and caprices of Customs officers. Apart from paying these bills, they will still extort you on your car on the road. They will give you this valuation, you will pay the duty and another Customs official will question the duty paid again.
“The genesis of these problems are the targets the Federal Government placed on Customs for revenue generation. What they have to do is for its officials to fleece importers and agents.”
The Secretary of the ANLCA Board Michael Taiwo Oyeniyi said a lot of cargoes were trapped at the ports.
“There are some vehicles about to be released, but we pleaded with the management to give us, at least, a period of 90 days to clear the backlog. Let me say this on record: no freight forwarder in this country goes against VIN valuation, it is the system of operation that we are against,” Oyeniyi declared.
A Customs licensed broker, Prince Kennedy Osita, explained that agents were used to declaring their cargo for the Customs, after which they were transferred to the electronic VIN system.
However, in using it, Osita said, the agents discovered that the value was increased by 400 per cent.
He added, “When you input a vehicle of 2010, it brings a value of a brand new 2010 car instead of used car. They are neglecting the poor masses. It increases the cost of prices of cars averagely and affect cab owners who do Uber and Bolt.”
Responding to the concerns, the Assistant Comptroller-General of Customs, Zone A, Modupe Aremu, maintained that the VIN would not be scrapped. But he promised that it would be modified.
Aremu explained, “The modification will take care of all their issues. It was a family meeting, we talked and rubbed minds on how to get a solution to the strike. We will get back to them on that.
“We had three sessions of training on this VIN with them, so we didn’t expect this kind of response from them. Because of this, we will go back to our drawing board and modify some of the issues they raised. The VIN has come to stay.”
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