No more road taxes in Nigeria

The Joint Revenue Board (JRB), formerly known as the Joint Tax Board (JTB), has placed a nationwide ban on the collection of road taxes, levies, and related charges through checkpoints, including the use of road stickers by state and non-state actors. This decisive move is part of a broader, ongoing effort to sanitise Nigeria’s tax administration, eliminate multiple taxation, and significantly improve the ease of doing business across the federation.

Key Additional Facts and Context:

1. Legal & Administrative Basis: The ban is not merely a policy suggestion but is grounded in the Schedule to the Taxes and Levies (Approved List for Collection) Act, Cap. T2, LFN 2004. This law explicitly states that "Road taxes, cart fees, wheel barrow fees" and similar charges are not authorized for collection by any government tier. The JRB's action is thus an enforcement of long-standing, but often ignored, federal law.

2. Target of the Ban: The prohibition specifically targets:

   · State Governments: Who often impose "road stickers" or "consignment charges" on trucks and commercial vehicles.

   · Local Government Councils: Historically the most prolific enforcers of "motor park levies," "wheelbarrow taxes," and similar charges at innumerable checkpoints.

   · Non-State Actors: This includes unions, associations, and touts who illegally collect fees on roads under the guise of "loading charges," "association dues," or "security fees," often in collaboration with or through coercion of local officials.

3. Direct Link to Ease of Doing Business: The proliferation of these illegal checkpoints has been a major clog in Nigeria's internal logistics and supply chain. Reports from agencies like the Presidential Enabling Business Environment Council (PEBEC) and the World Bank's Doing Business reports have consistently highlighted:

   · Cost Inflation: Illegal levies add billions of Naira annually to the cost of transporting goods.

   · Delays and Inefficiency: Checkpoints cause massive traffic delays, leading to spoilage of perishable goods and unreliable delivery schedules.

   · Harassment and Extortion: Drivers and businesses face constant harassment, which fosters corruption and an unpredictable business environment.

4. The "Sanitisation" Agenda: This ban is a flagship action under the JRB's renewed mandate to harmonize tax collection. It aligns with:

   · The Federal Inland Revenue Service (FIRS) restructuring towards tech-driven administration.

   · Initiatives like the National Single Window and e-Customs aimed at seamless port and border operations.

   · The push for a centralized electronic tax filing and payment system to minimize physical interactions and leakages.

5. Practical Challenges and Enforcement: While the ban is clear, its success hinges on critical challenges:

   · Enforcement Mechanism: The JRB itself lacks a police force. Effective enforcement requires the direct buy-in and action of state governors, commissioners of police, and the federal security apparatus to dismantle checkpoints.

   · Revenue Replacement for States/LGAs: Many sub-national governments rely on these irregular revenues. The JRB and federal government must promote alternative, sustainable revenue sources like the Improved State IGR through Pay-As-You-Earn (PAYE) collaboration and property tax modernization.

   · Resistance from Beneficiaries: Powerful informal networks that profit from the current system will likely resist. A strong public awareness campaign for truckers and businesses to report violations is crucial.

6. Expected Benefits: If successfully implemented, the ban should lead to:

   · Reduced cost of food and goods due to cheaper logistics.

   · Faster transit times across the country.

   · A more formalized, transparent, and digitally traceable tax system.

   · Enhanced competitiveness of Nigerian businesses and attractiveness for investment.

In conclusion, the JRB's ban is a bold, necessary step to translate long-existing tax laws into reality. Its ultimate impact will be a critical test of the political will of both federal and state authorities to override entrenched informal interests for the sake of a more efficient, formal, and business-friendly national economy..