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Tuesday, 3 March 2020

Gov’t considering full customs exemption on imports of auto components

The government is considering a full customs exemption on imports of auto components: The Trade Ministry could grant a full customs exemption on imports of auto components as part of its strategy to incentivize local manufacturers, the local press reports, citing unnamed government sources. Nissan and Toyota requested earlier this year that the government exempt them from paying customs on imported parts, asking that they receive the same benefits provided to other companies from other countries covered by trade agreements.

This apparently is just one proposal on the table for the government’s long-gestating strategy to help local manufacturers, who have long complained that they are unable to compete with imported zero-customs European vehicles. The ministry is reportedly also considering reducing customs on all cars to 10% in addition to the 30-125% development fees. We were told last summer that the cabinet had settled on a plan that would have reduced customs for companies to 5.6-20%, depending on the percentage of local content used.

The ministry is planning to finalize the strategy within the coming weeks before sending to cabinet for review, the sources said.

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