From FAAC Table: The Federal account Allocation Committee Flags Weak Compliance in National Road Tax Scheme

The Federation Accounts Allocation Committee (FAAC) has raised concerns over poor responses by several states to the national road tax scheme, warning that weak compliance could undermine efforts to strengthen transport infrastructure funding and improve accountability in the road sector.

The committee’s observation highlights persistent gaps between policy design and implementation,

particularly in revenue collection, remittance, and reporting linked to road usage.

Uneven Adoption and Compliance Across States

FAAC noted that while the road tax scheme was designed to create a sustainable funding stream for road maintenance and development, adoption and compliance levels vary widely across the federation.

Some states have yet to fully align their internal processes with the framework, resulting in low collections and inconsistent remittances. These gaps, FAAC observed, limit the scheme’s effectiveness and complicate national planning for road investments.
In addition, administrative bottlenecks—ranging from outdated vehicle databases to manual collection processes—have weakened enforcement. FAAC officials emphasized that without standardized systems and clear timelines, leakages and underreporting will continue to erode expected revenues. The committee stressed the need for states to modernize collection mechanisms and harmonize data with federal platforms.

Revenue Implications and Infrastructure Funding Risks

According to FAAC, the shortfall in road tax compliance has direct implications for infrastructure financing. Road maintenance budgets depend increasingly on dedicated revenue sources as fiscal pressures rise, and weak performance under the scheme constrains available funds. This, in turn, delays repairs, increases vehicle operating costs, and heightens safety risks on major corridors.

The committee also pointed to accountability concerns, noting that incomplete reporting makes it difficult to track how much is collected versus what is remitted. FAAC underscored that transparent accounting is essential to building public trust and ensuring that road taxes translate into visible improvements on highways and urban roads.

Calls for Reforms, Enforcement, and Collaboration

FAAC called for coordinated reforms involving state governments, transport authorities, and revenue agencies to improve outcomes. Recommendations include digitizing vehicle registration and tax payments, strengthening enforcement against evasion, and introducing performance benchmarks tied to remittances. Capacity-building support and peer learning among states were also proposed to close compliance gaps.
The committee further urged political leadership at the state level to prioritize the scheme, arguing that consistent enforcement and clear communication with motorists would improve compliance.

FAAC reaffirmed its commitment to monitoring progress and engaging stakeholders to ensure the road tax scheme delivers on its objectives.