Oyedele Asks FG to Stop Annual Vehicle Ownership Verification Tax

By Modupe Gbadeyanka

A tax expert, Mr Taiwo Oyedele, has slammed the federal government over its decision to demand an annual levy of N1,000 for proof of vehicle ownership.

In a post via his Twitter page over the weekend, he described this form of revenue generation as retrogressive, noting that it is illogical to ask motorists to prove the ownership of vehicles every year, calling on the government to stop the move.

The federal government introduced a yearly vehicle ownership verification tax, which the Lagos State government said it would implement from this month.

“This tax is retrogressive. It is 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.

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

“According to the NBS, there are about 12 million vehicles in Nigeria. If we assume that everyone complies and pays to the government, the tax will generate gross receipts of N12 billion annually before taking into account the likely high cost of collection and possible leakages in addition to the unquantifiable time, cost and burden of compliance by vehicle owners.

“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.

“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 posted.