Anger As FG Plans To Make N12bn From Vehicle Proof Of Ownership

The Federal Government is targeting over N12 billion from the new vehicle tax also known as Proof of Ownership Certificate.

Last week, the government imposed a tax in which vehicle owners are required to pay N1000 annually for their vehicles to be verified.

The decision has angered not a few Nigerians who criticised the federal government for imposing yet another tax on the citizens in the face of the hard economic situation in the country.

The development will further compound the hardship being experienced by vehicle owners after the recent belt-tightening measures introduced by the federal government, according to economic experts who spoke on the issue.

Abdulhafiz Toriola, the Permanent Secretary, Lagos Ministry of Transportation, who disclosed this in Abuja, said the certificate would assist the government to ascertain the integrity of all vehicles registered on the National Vehicle and Identification Scheme database and track car theft and recovery of stolen vehicles.

He said, “To this end, the Federal Government has introduced the issuance of annual Proof of Ownership Certificate for all registered vehicles.”

According to the National Bureau of Statistics, there were 11.76 million vehicles in Nigeria as of Q2 2018, and the vehicle per population ratio was put at 0.06 for the period. Par various reports, Nigeria imports about 400,000 vehicles annually.

A report by The PUNCH recently stated that a total of 192,287 vehicles were imported through the Ports & Terminal Multipurpose Limited into the country in the first 10 months of 2021, while only 114,159 vehicles came through said terminal in the same period of 2022.

Toriola stated that the Proof of Ownership Certificate will serve as official documentation for a vehicle’s legal ownership. He said, “The POC will contain vital information, including the vehicle’s registration details, such as license number plate, model, year of manufacture in addition to the owner’s name and address.

“Having critically reviewed the challenges encountered in ensuring the promotion of Safety and Security of lives and property through the issuance of POC nationally and especially in our dear State, the Joint Tax Board, in its communiqué issued at the end of the emergency meeting held on May 9, 2023, adopted, and made a resolution that proof of ownership be issued to motorists on an annual basis nationwide.”

He added that Lagos would begin collection of POC fees from the beginning of July. Other states are yet to make their positions known yet. Mixed reactions have trailed this move by the government, and the Fiscal Policy Partner and Africa Tax Leader at PwC, Taiwo Oyedele, has stated that the tax is retrogressive, ill-conceived, and poorly designed.

He said, in a LinkedIn post, “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 noted that the tax adds complications to the myriad of multiple taxes which make doing business difficult and dampens tax morale.

He added, “While this tax will not necessarily stop the earth from rotating, it is wrong both in terms of signalling from a multiple taxation perspective and in terms of timing given the recent fuel subsidy removal.

“To be sensitive and demonstrate empathy, the government should not impose any new or higher taxes on transportation, energy, or food which are the most impacted by the subsidy removal. The same reasons why the recent attempt to collect VAT on diesel needs to be reconsidered.”