Economy
New Vehicle Ownership Verification Fee to Generate N12bn Annually for Government
Vehicle owners required to pay N1,000 annually for Proof of Ownership Certificate verification
In a move aimed at bolstering vehicle security and curbing car theft, the Federal Government has announced the introduction of an annual Proof of Ownership Certificate (POC) for all registered vehicles.
This new measure, set to commence in July, will require motorists to pay a N1,000 verification fee for the issuance of the certificate.
The government expects to generate approximately N12 billion per year from this initiative.
The Permanent Secretary of the Lagos Ministry of Transportation, Abdulhafiz Toriola, emphasized the significance of the POC in ensuring the integrity of vehicles registered on the National Vehicle and Identification Scheme database.
The certificate will contain essential information such as the license plate number, model, year of manufacture, and owner’s details, serving as official documentation of a vehicle’s legal ownership.
He said, “To this end, the Federal Government has introduced the issuance of annual Proof of Ownership Certificate for all registered vehicles.”
However, the announcement has sparked mixed reactions among the public. While some individuals appreciate the government’s efforts to enhance vehicle security, others have criticized the move as retrogressive, ill-conceived, and poorly designed.
Taiwo Oyedele, the Fiscal Policy Partner and Africa Tax Leader at PwC, voiced concerns about the tax’s potential negative impact on business operations and tax morale.
Oyedele argued that the verification fee adds to the burden of multiple taxes already faced by businesses, making it more challenging to operate.
He also highlighted the ill-timing of the tax, considering the recent removal of fuel subsidies. He urged the government to exhibit sensitivity and empathy by refraining from imposing new or higher taxes on transportation, energy, or food, which have already been significantly affected by the subsidy removal.
According to the National Bureau of Statistics, Nigeria had 11.76 million vehicles as of Q2 2018, with an annual import rate of approximately 400,000 vehicles.
While Lagos State has announced the immediate implementation of the POC fees, other states are yet to make their positions known.