The FEDERAL government has expressed its readiness to cut down from 35 percent the levy to be paid on imported cars to five percent, a draft bill of the 2020 Finance Bill to be presented to the National Assembly has revealed.
Details of the bill shared by the presidency also showed that the import duty of tractors and vehicles for the transportation of goods has been slashed from 35 percent to 10 percent.
Companies that donated to the COVID-19 relief fund under the private sector-led Coalition Against COVID-19, CACOVID, were granted tax relief in the bill.
Also, in order to improve the ease of doing business in the country, the bill proposes that software acquisition now qualifies as capital expenditure.
Last Wednesday, the Minister of Finance, Budget, and National Planning, Zainab Ahmed, said the reduction in import duties and levies was meant to reduce the cost of transportation.
“The reason for us is to reduce the cost of transportation which is a major driver of inflation especially food production,” she said.
The minister said this while addressing State House correspondents at the end of the Federal Executive Council, FEC, meeting on Wednesday.
To improve the ease of doing business, the bill also proposes that software acquisition now qualifies as capital expenditure.
The minister had previously explained that the reduction in import duties and levies is targeted at reducing the cost of transportation.
“The reason for us is to reduce the cost of transportation which is a major driver of inflation, especially food production,” she told State House correspondents at the end of FEC on Wednesday, November 18.
In 2019, the Comptroller-General of the Nigeria Customs Service, NCS, Hameed Ali, had urged the federal government to reduce the levy paid on imported cars to 10 percent.
At the time, Ali argued that the levy, which is paid in addition to the 35 percent import duty, has discouraged importers; causing them to divert their importation to neighboring countries and heightened smuggling.
The bill, which was recently approved by FEC, will become law after it is passed by the legislature and assented to by President Muhammadu Buhari.