By Kamil Opeyemi
A tax expert and Fiscal Policy Partner and Africa Tax Leader at PwC, Taiwo Oyedele, has punched the Bola Tinubu administration for planning an annual tax of N1000 on every vehicle owner in Nigeria to prove their ownership yearly.
Oyedele, while commenting on the latest decision by the Federal Government, said the proposed tax is one of those factors creating challenges against the ease-of-doing-business in Nigeria.
In his statement, Oyedele said, “This tax is retrogressive. It is ill conceived and poorly designed.” He explained that apart from the payment which he said “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 said that the tax adds complications to what he called “the myriad of multiple taxes” which he said makes business difficult.
He stated, “According to the NBS, there are about 12m 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 account of the likely high cost of collection and possible leakages in addition to the unquantifiable time, cost and burden of compliance by vehicle owners.
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, 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.”
He advised the government to set aside the new tax adding that failure to do that would set a bad precedent. Oyedele said should the new tax be implemented without any resistance from Nigerians, government would soon ask citizens to renew their birthday certificates and Certificates of Occupancy annually.