FG To Make N12 Billion Annually From New Vehicle Tax; Expert Slams Govt

The Federal Government is all set to impose a new vehicle tax on Nigerians that will make N12 billion a year from the citizens. According to the new vehicle tax, every motorist is supposed to pay N1,000 for a proof of ownership certificate on a yearly basis.

The Permanent Secretary, Lagos Ministry of Transportation, Abdulhafiz Toriola disclosed this new tax last week, and following the announcement, the National Bureau of Statistics revealed that there are about 12 million vehicles in Nigeria. This means the government will collect N12 billion annually.

A tax expert named Taiwo Oyedele slammed this new vehicle tax and called it, "retrogressive." He noted that this tax has been ill-conceived and poorly designed.

"Apart from the payment which seems to be solely for revenue generation, and perhaps more for non-state actors than for the government, it is illogical to have to prove annually that you own a vehicle for which you already have a certificate of proof of ownership issued by the government," he wrote on Twitter Sunday.

He added, "The tax adds complications to the myriad of multiple taxes which make doing business difficult and dampens tax morale."

Oyedele went on to refer to the National Bureau of Statistics and said there are about 12 million vehicles in the country and if "everyone complies and pays to the government, the tax will generate gross receipts of N12 billion annually before taking account of the likely high cost of collection and possible leakages in addition to the unquantifiable time, cost and burden of compliance by vehicle owners."

The expert stressed that this tax is wrong in both terms - signaling from a multiple taxation perspective and adding it when fuel subsidy has been recently removed. He suggested the government be more sensitive and show empathy towards Nigerians.

He urged the government not to impose any new or higher taxes on transportation, energy, or food which are the most impacted by the subsidy removal. He also pointed out the VAT on diesel imposed by the government, saying that it should be "reconsidered."

"The tax should be set aside in the interest of good order and to prevent setting a bad precedent. Who says we cannot be asked to also renew our birth certificates, C of O, etc on an annual basis if this succeeds?" he concluded.

Oyedele's tweet came after the Lagos Ministry of Transportation's Permanent Secretary said, "The Federal Government has introduced the issuance of annual Proof of Ownership Certificate (POC) for all registered vehicles" on June 27.

Toriola disclosed that this resolution was passed after an emergency meeting held on May 9. He explained that the POC will consist of vital information, including the vehicle's registration details, such as license number plate, model, and year of manufacture in addition to the owner's name and address.