Proof of Ownership: FG to Generate N12bn from 12 Million Vehicles in Nigeria

• Nigeria's Federal Government has set its sight on a windfall of billions of naira from the newly introduced vehicle tax
• The Federal Government will boost its coffers with the implementation of the annual fee of N1,000 for a Proof of Ownership certificate
• With an approximation of 12 million vehicles in the country, this would potentially result in estimated gross receipts of N12 billion

The Federal Government's imposition of a N1,000 annual charge for a Proof of Ownership Certificate on all vehicles in the country will generate about N12 billion in revenue.

This is according to calculations of the new fee by the number of vehicles available within the country's borders, according to data.

According to an earlier report by Legit.ng, the Federal Government of Nigeria recently introduced a new policy mandating motorists to pay an annual fee of N1,000 to verify their Proof of Ownership Certificate.

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Previously, the Federal Road Safety Corps (FRSC) provided this certificate at no cost to new vehicle buyers.

With the implementation of this new fee, vehicle owners now face an additional expense to regular payments for vehicle particulars and registration.

12 million vehicles equal N12 billion in revenue for FG

Based on National Bureau of Statistics data, Nigeria had 11.76 million vehicles in Q2 2018, with a car per population ratio estimated at 0.06. Multiple reports indicate that approximately 400,000 vehicles are imported into Nigeria annually.

A recent report by The PUNCH revealed that during the first 10 months of 2021, 192,287 vehicles were imported into the country through the Ports and Terminal Multipurpose Limited.

However, in 2022, vehicles entering the same terminal decreased to 114,159.

With an approximation of 12 million vehicles in the country and the optimistic assumption that everyone fully complies and dutifully pays the required N1,000 to the government, this would potentially result in estimated gross receipts of N12 billion from the implemented tax.

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Even as more Nigerians protest the new tax, Abdulhafiz Toriola, the Permanent Secretary, Lagos Ministry of Transportation, has confirmed that the collection of the POC fees would begin in Lagos in July 2023.

Expert says annual payment of Proof of Ownership Certificate is retrogressive

In related news, Legit.ng reported that Taiwo Oyedele described the federal government's plan to charge private and commercial motorists the sum of N1,000 for proof of ownership certificate annually as retrogressive.

Oyedele, a fiscal policy partner and African tax leader at PricewaterhouseCoopers (PwC), tweeted that the imposition of the tax shows poor conception and inadequate design.

He suggests that apart from functioning as a revenue-generating tool, one could argue that the benefits of this mechanism primarily favour non-state entities rather than the government.

He added that it becomes nonsensical to be compelled to provide annual proof of vehicle ownership when you already possess a government-issued certificate validating your ownership.

Source: Legit.ng