|Ngozi Okonjo-Iweala Finance Minister of Nigeria (Photo credit: Wikipedia)|
On November 14, 2013, Dr. Ngozi Okonjo-Iweala signed a new law that increases the tariff on imported cars from 20 percent to 70 percent. Ref: http://www.punchng.com/news/
This is an extremely concerning decision to every well-meaning Nigerian. Why does the Nigeria Finance Minister/Secretary have the power to simply make this change? Where are the checks and balances? This decision is going to have deep impacts upon the citizens of Nigeria as well as the Nigerian government.
Why is it that imported cars will be getting this significant tax increase? One of the major problems is that this will impact every car purchased in Nigeria. There are no auto manufacturing companies that are based out of Nigeria, therefore, consumers only have the option of purchasing an imported vehicle.
I am furthering wondering what this additional revenue will be supporting. Will it go into making the necessary repairs for the roads? Will it go to helping the citizens that are experiencing financial difficulty and need governmental support?
In the US car dealers must be licensed. There are many regulations that go into licensing of car dealers. The car dealerships are inspected on a regular basis to ensure that they are complying with the laws and regulations that govern auto dealers.
In the US auto dealers pay a standard percentage of tax on the purchase of a vehicle. This percentage rate doesn’t differ based on whether the vehicle was imported or is domestic. When additional tax increases are proposed, there is a rigorous process in order for this to occur. This process goes far beyond the discretion of one person a Finance Minister/Secretary, or the Federal Executive Council. There are also public hearings in which the citizens are able to voice their concerns and provide input.
I would strongly urge the Nigeria Finance Minister/Secretary to reconsider this drastic decision. At the end of the day this will adversely impact the financial livelihood of the citizens of Nigeria thereby impacting the government.