On pollution tax on vehicles

Following the recent trend all over the world to curb environmental and health hazards arising from pollution caused by vehicles’ hydrocarbon emission, the Federal Government, under a joint effort by the federal ministries of Environment, Petroleum Resources, Industry, Trade and Investment as well as United Nations and Global Fuel Economy Initiative, is planning stringent measures against worsening level of pollution in Nigeria.

An actionable aspect of the stringent measures to be taken would be the implementation of high tax and tariffs regime on the importation of used vehicles. What this would mean for car users is that the importation of used vehicles popularly known as Tokunbo, which currently attracts 35 per cent tariff would have the tariff increased to about 70 per cent. Besides being a punitive action against pollution, the Federal Government envisioned that this development would promote the introduction and manufacture of electric and eco-friendly vehicles in Nigeria.

The Minister of State for Environment, Ibrahim Jibril, made this known at a recent forum in Abuja on ìClean Fuels and Clean Vehicles in Nigeria.î According to Jibril, who was represented by a Permanent Secretary of the ministry, Usman Ahmed: ìGovernment will put measures in place including appropriate tariffs and taxes to discourage the importation of old and rickety vehicles, encourage local manufacturing and assembling of vehicles, promote the use of alternative fuels such as Compressed Natural Gas, Liquefied Natural Gas and the use of electric vehicles, efficient and effective means of mass transportation such as rails and water ways.î

As a measure to achieve the sustainable development goal of good health through a clean, safe and pollution-free environment, the effort is, in principle, a laudable initiative. However, when viewed from the standpoint of utility and need, the plan would be difficult to implement; and if implemented would be difficult to sustain.

In principle, tax on cars is a government approach all over the world to focus on how much pollution vehicles cause in the biosphere that is continually threatened by the hazards of industrialisation and modern technology. The position of many governments is that old cars cause some harm to the environment by being a major agent of pollution. And with the principle of the polluter pays for the injury to the environment, then the tax regime imposed on old, rickety vehicles becomes a motivation for motorists to switch to cleaner alternatives. In this way new taxes are justified.

This justification is also instructive for Nigeria which has become a dumping ground for all the vehicles discarded by motorists in more economically viable countries. Where the difference lies is that, unlike those countries that have made out long-term plans on environmental sustenance and healthcare, Nigeria merely seems to be a copycat of trends around the world. In well-organised countries, alternatives are provided to mitigate against vehicular pollution. Cars are manufactured with pollution-controlling devices like multiple ways catalytic converters, cleaner fuels and there are more eco-friendly cars such as electric cars and hydrogen-powered cars that were introduced before stringent pollution laws and taxes are implemented.

In Nigeria, such tax regimes are indeed far from being a motivation for a switch to cleaner alternatives for the singular reason that Nigeria does not manufacture anything. This irony is accentuated by the fact that the only viable means of public mass transit, the road transport, depends mainly on imported old vehicles from developed countries. Even middle class income earners with families depend on imported old vehicles as private means of transportation, and would be loath to give them up because they do not have the means for the more expensive and less polluting cars.

What this means is that, rather than the concern for a cleaner environment which more developed countries have, the proposed tax regime seems primed for only increasing revenue generation and raising funds for the government. It is an inconsiderate government that proposes a policy without envisioning its feasibility, sustainability, measurability, timeliness and long-term effect on the people; that makes plans that will gravely affect its people without putting viable alternatives in place. It is owing to these inconsistencies that people are sceptical about whatever sense the government’s pollution tax tends to make.

For this new tax regime on pollution to make any sense, the Federal Government should be holistic in its attempt to fix the system. It should not only encourage local manufacturing and assembling of vehicles, but also ensure that these vehicles are available and affordable. Notwithstanding their affordability, they must also meet the global technological standard of current pollution-free automobile production. Besides, the so much talked about promotion of alternative fuels such as Compressed Natural Gas, Liquefied Natural Gas and the use of electric vehicles, must also be in place before any stringent measure is taken.

Elsewhere, there is a ready availability of various means of municipal transportation that make the tax incentive imposed on users of old cars a reasonable proposal. Here, no such things exist. Municipal mass transportation is mainly by road. In this regard, the government needs to ensure that rails and water ways are explored and promoted as efficient and effective means of mass transportation.
What is being proposed is merely reactionary and a piecemeal approach that is nurtured by corruption.

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Ibrahim Jibrilpollution

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