The Federal Airports Authority of Nigeria (FAAN) has announced the introduction of electronic tags (E-tags) as a mandatory requirement for entry into the 24 federal airports in Nigeria. Their sale commenced on May 17, and all users of federal airports, including the President and Vice President, must pay tolls at the gates before gaining access. This policy is part of the 21 policies and projects approved by the Federal Executive Council (FEC) aimed at boosting the economy, facilitating investments, and promoting the ease of doing business in the country.
Further, the E-tags will be sold at a cost of ₦5,000 each, and motorists who do not have them will have the option to pay cash at the access gates before entry to the airport. However, defaulting drivers will be shut out, and travellers will have to factor in this additional cost into their already tight budgets. The introduction of E-tags comes at a time when Nigerians are already grappling with the effects of the removal of Subsidies and the floating of the naira.
NLC has been clamouring for minimum wage increase.
Also, the Nigeria Labour Congress has been calling for an increase in the Minimum Wage to cushion the effects of these policies, but the government seems to be looking for ways to increase Revenue instead. Its introduction is seen as a new Tax burden on travellers, especially at a time when the country is facing economic challenges. According to FAAN, these tags will help to reduce congestion at the airports and improve security. However, many are skeptical about the effectiveness of this policy, especially given the country’s history of failed revenue-generating initiatives.
Additionally, the E-tags will be sold at designated locations at the international airports in Lagos and Abuja, and travellers can also obtain them by calling the designated phone numbers. Its introduction has raised many questions, and travellers are already feeling the pinch of the new policy. Many are worried about the additional cost and the hassle of purchasing E-tags, especially at a time when the country is facing economic challenges. In addition, travellers will also have to pay other taxes and fees, including the passenger service charge, the airport development levy, and the value-added tax. This means that the cost of traveling in Nigeria will continue to rise, making it even more difficult for ordinary citizens to afford.
Similarities and differences with developed countries.
When compared with developed countries, the new E-Tag tax in Nigeria shares similarities with other developed countries. For instance, in the Netherlands, there is a registration tax that is progressive and varies between EUR 376 and EUR 448 per g/km exceeding the level of 1g/km. In Denmark, the registration tax is relatively high and based on CO2 emissions. Similarly, in Norway and Iceland, tax rebates and bonuses on fully electric vehicles can reduce the amount of taxes to about 0% of the ex-tax price.
However, there are also differences between the new E-tag tax in Nigeria and other developed countries. For example, in Finland, the e-government system is more advanced and has a longer history compared to Nigeria. Additionally, Finland has a more developed ICT infrastructure, which is essential for the success of e-government systems. Moreover, Finland has a lower level of Corruption and a more stable and secure environment, which are crucial for the implementation of e-government systems. In contrast, Nigeria faces challenges such as a lack of awareness about computer science and ICT technologies, which hinders the implementation of e-government systems.
Related Article: Aviation industry requires rapid reform
To sum up, the introduction of E-tags is a controversial policy that has raised many questions. While the government argues that it will help to boost revenue and improve security, many are skeptical about its effectiveness and worry about the additional cost burden on travellers. As the country continues to grapple with economic challenges, it remains to be seen how the introduction of these tags will affect travellers and the Aviation sector as a whole. It comes at a time when the country is facing economic challenges. While the government argues that it will help to boost revenue and improve security, many are skeptical about its effectiveness and worry about the additional cost burden on travellers.