One month after the introduction of the Vehicle Identification Number (VIN) Valuation system, freight forwarders at the two major Roll-on Roll-off terminals in Nigeria, Tin Can Island Port and the PTML Terminal have issued a 72-hour industrial action notice to the Nigeria Customs Service (NCS) over the failure of the new valuation system to generate accurate value payable on imported cars.
The Information and Communication Technology (ICT)/Modernisation Unit of the Nigeria Customs Service had in line with the Federal Government’s policy on ease of doing business in January, unveiled the VIN valuation system that uses artificial intelligence to allocate appropriate values and taxes payable on imported vehicles
The freight forwarders, at a meeting held at the PTML Terminal on Tuesday, lamented that hundreds of cars are now stranded at the ports due to the failure of the new customs valuation system to generate accurate value payable on imported cars.
The freight forwarding associations that came together under a joint umbrella to issue the strike notice include, Association of Nigerian Licensed Customs Agents (ANLCA), National Association of Government Approved Freight Forwarders (NAGAFF), National Council of Managing Director of Licensed Customs Agents (NCMDLCA), Association of Registered Freight Forwarders of Nigeria (AREFFN) and African Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON).
The freight forwarders have written a letter to the Customs Comptroller General (CGC), Hameed Ali, giving him 72 hours notice to look into the new VIN valuation system or else, the agents would shut down the ports.
Speaking on behalf of the associations, the Chairman of NCMDLCA PTML Chapter, Abayomi Duyile, said there are lots of flaws in the new customs valuation system as there was no consideration for rebate and depreciation value in the valuation being issued on imported cars.
He lamented that in the past two weeks, agents could not clear their vehicles out of the port, which has led to huge demurrages and storage charges at shipping companies and terminals.
He said while the VIN was introduced to limit physical contact with valuation officers and invariably stop corruption, the values generated from the system are high and outrageous.
Duyile questioned how Customs arrived at the new value; especially as the value of old vehicles has increased to millions of naira despite depreciation.
“If you calculate what we paid for vehicles last year, by this year, it is supposed to have reduced based on depreciation, let us assume you paid N500,000 for a 2010 Benz last year, and this year they are asking you to pay N1.5million, this is outrageous. These vehicles are old about 13 to 15 years of age and you are expecting us to pay several millions of Naira to clear them? We want full implementation of the customs law that gives us 50 per cent for five-year-old vehicles.
“For about two weeks now, we have been having problems. The system is not working, many of our members try to make input from our bill of laden, but the VIN system is not receiving. Customs should look at the system and correct the flaws, the value is too high, comparing the situation of the economy,” he said.
It was gathered that last week, the heads of valuation units of the two customs commands were summoned to Customs headquarters in Abuja and were ordered to stop issuing manual valuation and commence full implementation of the VIN Valuation.
However, the freight forwarders have said customs ought to have test-run the VIN valuation and ensure that the system is up to date before introducing it.
They also complained that the system was introduced by Customs without prior notice, sensitisation or any circular for stakeholders.
Speaking further, Duyile said demurrage is piling up with billions of naira lost, noting that this would also affect Customs revenue generation.
” Our clients are now paying more on the vehicles because of the delay from customs,” he said.
On his part, the PTML Chapter Chairman of ANLCA, Oluwole Obey, said in the letter sent to the Customs headquarters, the 72 hours notice issued is enough for the service to look at the challenges, after which if nothing is done, freight forwarders would down tools as they cannot continue with this system.
“We are not running away from VIN Valuation, but they did not consider the depreciation of vehicles, the price is supposed to be depreciating, they didn’t consider the rebate in the valuation,” Obey said.
Meanwhile, the spokesman for the PTML Customs Command, Muhammed Yakubu, said the command held a prolonged meeting with leaders of the freight forwarding associations earlier on Tuesday for about three hours in order to sensitise them on the new system.
According to Yakubu, the VIN valuation, which is a federal government system of creating seamless valuation system on importation of vehicles and to facilitate trade, has come to stay adding that, as expected of any new system, there would be teething problems
Speaking on the valuation, Yakubu said: “What happened is that many agents were issued manual valuation before the VIN valuation commenced. The majority of these jobs were alerted because we have what is called ‘customs value’ which comes without a rebate.
“So, automatically, the system downgrades the valuation that was issued manually and generates the customs value, which cannot be tampered with, this is why we had a lot of challenges. Some agents got the manual valuation and now they are asked to pay the outstanding in order to meet up.