Vehicle Ownership Renewal in Nigeria: An Unwelcome Tax?

Explore the controversy surrounding the newly introduced Vehicle Ownership Renewal policy in Nigeria.

Learn why experts like Taiwo Oyedele see it as a regressive step.

One of Nigeria’s leading voices in fiscal policy, Taiwo Oyedele, has voiced strong objections to the newly introduced policy of annual renewal of proof of vehicle ownership.

He believes that such a move, initiated by the Lagos State Government, is a hazardous precedent, opening a gateway for more regressive taxes in the country.

The burning question is, why should citizens prove their ownership annually when they already have a government-issued certificate of ownership?

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An Insensitive Tax Burden

Oyedele asserts that introducing additional taxes while the country is still dealing with the aftermath of fuel subsidy removal is deeply insensitive.

The burden of taxation can be overwhelming for Nigerians trying to navigate the financial toll of fuel subsidy removal. Is the government being inconsiderate?

Oyedele’s Perspective

In his Twitter post, Oyedele outlines his arguments, labeling the policy as regressive, ill-conceived, and poorly executed.

He asserts that the payment, which appears to be primarily for revenue generation, is misguided.

For Oyedele, it’s irrational to demand annual proof of vehicle ownership when owners already possess a government-issued certificate of ownership.

Taxes, Businesses, and Morale

Oyedele further points out that this tax adds to the plethora of multiple taxes, making it challenging to conduct business and affecting tax morale negatively.

Would this move indeed act as a deterrent for business owners? Is this proof of ownership renewal creating more problems than it solves?

Wrong in Every Sense

Oyedele goes in depth explaining why the introduction of the proof of ownership renewal is wrong on all fronts.

He emphasizes the unfairness of the policy, especially considering the recent fuel subsidy removal, and argues that it sends the wrong signal from a taxation perspective.

A Troubling Precedent

One of his most pressing concerns is the potential for this policy to set a precedent for other absurd requirements.

Could Nigerians be asked to renew birth certificates or other official documents annually? If so, where would this end?

The Policy in Detail

On June 27, the Lagos State Government announced the commencement of the annual renewal of the Proof of Ownership Certificate for vehicles registered within the state, effective from July 1, 2023.

This move aligns with the communiqué issued by the Federal Government Joint Tax Board.

The Rationale Behind the Policy

According to Abdul-Hafiz Toriola, the Permanent Secretary of Lagos State Ministry of Transportation, the renewal process will ensure real-time tracking and maintain the integrity of vehicle records on the National Vehicle and Identification Scheme (NVIS) database.

But is this justification enough to burden vehicle owners with yet another fee?

What The Certificate Entails

The Proof of Ownership Certificate is proof that a vehicle is legally owned by the registered individual or entity.

It contains crucial information like license plate number, model, year of manufacture, and the owner’s name and address.

The question remains, isn’t this information already available with the government?

The imposition of annual renewal of proof of ownership seems to be a cause of consternation among vehicle owners and fiscal experts in Nigeria.

While the government may argue that the move ensures more accurate vehicle records, critics like Taiwo Oyedele see it as a regressive step, adding an unnecessary burden to citizens.

As the discussion continues, it remains to be seen how this new policy will impact the Nigerian populace.

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FAQs

What is the new policy introduced by the Lagos State Government?

The new policy mandates an annual renewal of the Proof of Ownership Certificate for vehicles registered within the state.

Who is Taiwo Oyedele?

Taiwo Oyedele is the Fiscal Policy Partner and Africa Tax Leader at PwC, and a vocal critic of the new policy.

Why is Oyedele opposed to the policy?

Oyedele argues that the policy is regressive and sets a dangerous precedent for more such taxes. He believes it’s unnecessary when vehicle owners already possess a government-issued certificate of ownership.

What does the Proof of Ownership Certificate contain?

Oyedele argues that the policy is regressive and sets a dangerous precedent for more such taxes. He believes it’s unnecessary when vehicle owners already possess a government-issued certificate of ownership.

What does the Proof of Ownership Certificate contain?

The certificate serves as valid proof that a vehicle is legally owned by the registered individual or entity, including information such as the license plate number, model, year of manufacture, and the owner’s name and address.

What impact could this policy have on Nigerians?

Critics argue that the policy could add an unnecessary financial burden to vehicle owners, dampen tax morale, and complicate the business environment.


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