Court sets date for suit challenging annual levy on vehicle ownership

The legal challenge over the government’s plan to implement an annual levy for a proof of vehicle ownership certificate (POC) has been shifted forward.

On Tuesday, a Federal High Court in Abuja adjourned the case against the levy until March 4, 2024.

In June 2023, the Federal Government, through the Joint Tax Board, announced a N1,000 annual fee for verifying POCs, sparking concerns among motorists. Lagos State swiftly began collecting the fee in July, becoming the first state to do so.

However, the Nigerian Bar Association Section on Public Interest and Development Law (NBA-SPIDLAW) filed a lawsuit challenging the legitimacy of the levy. They argued that the N1,000 fee constitutes unauthorized taxation and lacks proper legal backing.

Tuesday’s adjournment allows the court to examine the legal arguments presented by both sides. The NBA-SPIDLAW contends that the government overstepped its authority by introducing the levy without parliamentary approval and exceeding its stipulated tax powers.

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The plaintiffs, the chairman of NBA Spidel, John Aikpokpo-Martins, the Secretary, Funmi Adeogun, and a member of the Governing Council of NBA-SPIDEL, Francis Ogunbowale in the suit marked FHC/ABJ/CS/1285/2023 contended that the defendants commenced the policy without any statutory support directing vehicle owners to pay the mandatory fee.

The plaintiffs also asked the court to determine, “Whether the imposition of annual renewal of Proof of Ownership certificates on vehicle owners by the Defendants does not amount to multiple taxations and therefore illegal, because the I and 3rd Defendants (and the various State Governments, through their various tax agencies, have already issued certificates or evidence of proof of ownership to vehicle owners at the time of registration.”

Justice I.E. Ekwo adjourned the case to March 14th, 2024 to allow the Federal Government of Nigeria, Lagos State Government, and Joint Tax Board to file a defense against NBA-SPIDEL’s claims.

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