The Federal Government has directed all Ministries, Departments and Agencies (MDAs) to buy only vehicles made or assembled in Nigeria.
This is even as the FG is planning tax-free policy for workers earning only the minimum wage. They will be exempted from Personal Income Tax (PIT).
President Muhammadu Buhari disclosed this on Monday, 23 November, 2020 during the 26th Economic Summit held in Abuja.
Represented by the Vice President, Prof. Yemi Osinbajo, the president said the policy to patronise local auto makers is to insulate them from the policy that seeks to drop import duties.
“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 localizing 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 per year. Actual local production is 14,000 vehicles a year.
“We are not giving up on the local auto industry. We still have relatively high duty at 35%, so there is still a disincentive for importation. Secondly, we are promoting policy that the government must buy only locally manufactured cars,” the President said.
On tax exemption to minimum income earners, the president said it is in order to reduce the impact of inflation on 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.”