Vehicle owners have government’s proof of ownership, renewal unnecessary – PwC Tax Leader

FISCAL Policy Partner and Africa Tax Leader at Pricewaterhousecoopers International (PwC), Taiwo Oyedele, has described renewal of vehicle ownership, as now being demanded by the Federal government, as “unnecessary.”

To Oyedele, the vehicle renewal demand is a regressive tax model since vehicle owners already possess government-issued proof of ownership.

The Federal government has directed that with effect from July 1, 2023, vehicle owners must renew proof of vehicle ownership annually with the sum of N1,000.

But the PwC tax expert said, “Apart from the payment which seems to be solely for revenue generation, and more for non-state actors than for the government, it is illogical for people to have to prove annually that they own a vehicle for which they already have a certificate of proof of ownership issued by the government.”

Oyedele, quoting the National Bureau of Statistics (NBS) on Sunday, July 2 in a statement he issued through his official Twitter handle @taiwooyedele, stated, “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.”

Oyedele saw the introduction of the renewal policy as setting a bad precedent for more regressive taxes in Nigeria.

The new fee is an additional charge, besides payment for vehicle particulars and registration.

The PwC top shot regarded it as “insensitive” for the government to introduce additional taxes while Nigerians are still grappling with the devastating impact of fuel subsidy removal.

Oyedele described the introduction of the vehicle renewal tax as “retrogressive, ill-conceived, and poorly designed.”






     

     

    He noted that the tax also added complications to the myriad of multiple taxes, which he said made doing business in Nigeria difficult, and had dampened tax morale.

    He said, “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?”

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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