On 1st January 2021, the Finance Bill 2020, which introduced over 80 amendments to 14 different laws took effect. As usual, the goal of the legislation is to increase revenue collection of the Federal government and close tax loopholes that have been exploited over the years.
But what does this have to do with cars you ask? Import duties.
One of the key changes in this new Finance Act is the reduction in vehicle import levies. Import duty on tractors will reduce from 35% to 5%; mass transit vehicles (transporting more than ten persons) and trucks will reduce from 35% to 10%, and import levy for cars—from 30% to 5%.
This is an apparent reversal of the government's previous position on vehicle import and sales, using import levy to raise revenues. The plan was to discourage the consumption of imported vehicles in favour of domestic vehicles—an attempt to make the