Ministries, Others Must Buy Only Locally-Assembled Vehicles – Buhari
Posted by JUSTOURS
The Federal Government has advised ministries, departments and agencies (MDAs) to buy only vehicles assembled in the country. Government explained that the policy to patronise local automakers was to insulate them against a new policy reducing vehicle import duties.
President Muhammadu Buhari gave the directive to the MDAs at the 26th Economic Summit held in Abuja, Monday. Vice President, Prof. Yemi Osinbajo who Buhari represented at the event was responding to the issue of vehicle import duty raised at the summit during his speech presentation.
Government, meanwhile, said workers earning only the minimum wage will be exempted from Personal Income Tax.
Osinbajo explained that the reduction of import duty on vehicles would help cut down transportation cost. “The point of the reduction in levies on motor vehicles, commercial vehicles for transportation is to reduce the cost of transportation by reducing the cost of vehicles,” he said.
According to him, “With subsidy removal and the increase in fuel price and the pass-through to food prices, transportation costs had to be reduced. Now the automotive policy is directed at localising the production of vehicles. So the logic was to increase the duty and levies so that local production becomes more competitive. But the annual demand for vehicles is about 720, 000 vehicles; actual local production is 14,000 vehicles a year.”
He said government is not giving up on the local auto industry. “We still have relatively high duty at 35 per cent; so, there is still a disincentive for importation.
Secondly, we are promoting policy that the government must buy only locally manufactured cars.”
He also spoke on tax exemption for minimum income earners, explaining that it was meant to reduce the impact of inflation on such Nigerians.
“We are proposing in the new Finance Act that those who earn minimum wage should be exempted from paying income tax.These provisions which complement the tax breaks given to small businesses last year will not only further stimulate the economy, but are also a fulfilment of promises made to take steps to help reduce the cost of transportation and the impact of inflation on ordinary Nigerians,” the President said.
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