February 4 2019: Nigeria: Illegal Taxation Continues Despite Several Moves By Authorities To Halt Perpetrators
Nigerians in different quarters are crying over what they describe as multiple-taxation from touts and government. ODIMEGWU ONWUMEREunearths that this is giving them concern and they want authorities concerned to look into their ordeal. But their request seems a tall dream given authorities’ promises and measures put in place to rescue them
Illegal taxation of the unsuspecting members of the public is not strange to the government and public. What is strange to both is why perpetrators have refused to go out of business.
How to arrest the situation seems a tall dream despite government and public efforts put in place with tax authorities to curb the burden and help organised private sector out of the conundrum.
Nothing seems to have been corrected as the organised private sector is most hit regularly. This sector has been calling on government to aid business environment in the country by mounting its saddle that only legitimate and approved tax collectors are given the power to levy business operators across the country.
The organised private sector wants the subjective introduction of illegal taxes and levies across the country checked. It wants the government to make sure that business operators are safe from unwanted turmoil they are facing in the hands of illegal tax collectors. It believes that this portends danger for the business environment in the country instead of commerce would blossom.
The Clarion Calls
Government has been called upon to harmonise and rationalise the many taxes and levies business operators pay in order to whittle high cost of doing business in the country, but to no avail.
In spite of this, it was not the first time that successive governments in Nigeria were to pledge support to Nigerians and organisations to end illegal-taxation in the country. On January 11 2019, President Muhammadu Buhari reaffirmed the Nigerian government commitment to end the peril.
Buhari made this known when the leadership of the Amalgamated Union of Foodstuff and Cattle Dealers Association of Nigeria (AUFCDN), led by Alhaji Ali Tahir, paid him a visit at the presidential villa, Abuja.
Received by the Special Adviser to the President (Media & Publicity), Mr. Femi Adesina, President Buhari informed the August visitors his government’s roadmap to terminate illegal taxes in the country.
Hear Buhari, "I am appalled to learn that these illegal tax collections still persist. Bad habits are not easily dropped.
“But let me assure you that relevant security agencies will be reminded of their duties in preventing these bad practices and safeguarding people like you who go about their legitimate businesses.
“I will take up all your appeals and complaints in due course and together with state governments, we will attend to your proposals.’’
However, the General Secretary of the Union, Alhaji Ahmed Alarama declared before the president, saying, ‘‘Roadblocks are mounted by unknown persons on several highways including those in Adamawa, Taraba, Benue, Cross River, Ebonyi, Abia, Enugu, Anambra, Imo and Bayelsa States and these continue to constitute a hindrance to our businesses.’’
Buhari To AUFCDN: ‘‘Old Habits Die Hard”
Indeed, old habit dies hard, as it was not the first time that organisations were calling on government to come to their liberation in the hands of illegal tax collectors yet their expectations were like water poured on the shell of melon.
The leader of the Association of Waste Paper Dealers Association Onitsha branch, Anambra State, Comrade Samuel Momo bothered the government of the state recently over the issue of multiple-taxation his organisation that came into place since 2002 has been overloaded with.
Momo made his organisation’s voice heard, during their annual get-together in Onitsha. The address to the Anambra Government during the occasion was conveyed by the Pioneer Chairman of the association, Chief Hon. Mike Ibebuiwe, on behalf of Comrade Momo.
It was in December 2018, and Momo disclosed that they saw no reason they should be threateningly disturbed with multiple taxation in a recycling venture that has leveraged the economy by giving employment to the unemployed in the country.
For instance, over 250,000 workers are working in recycling companies, not to talk of over 100,000 working in factories and over 200,000, who are openly or subtly employed in the areas of sourcing or supplying of waste materials to factories, as according to Momo.
Notwithstanding, since 2017, the AUFCDN has been everywhere calling on the government to save its members from multiple-taxation they were suffering in the hands of revenue collectors on Federal highway, yet nothing seemed forthwith to address their predicament.
The National President of the Union, Alhaji Muhammadu Tahir, also made their plight in the hands of tax collectors known in 2017, and asked the government to help them out. But if government was lackadaisical to come to their recue, they would have no option than to take measures to help their members.
“If government didn’t take action, actually we are going to take action against this illegality because we are all Nigerians, we agree to pay revenue but in a legal way at the point of loading and at the point of offloading, which is where law allows us to pay revenue,” said the General Secretary of the Union, Ahammed Allahramma, during the year in quote.
Checks revealed that the union has been paying through its nostrils in the hands of the revenue collectors who mount the highway as early as 2am with dangerous weapons collecting money from the members of the union and others.
Allahramma divulged that a truck load of cattle from Maiduguri to Port Harcourt, was being charged about N250,000 by these revenue collectors.
According to Allahramma, “It has been long our members have been suffering from this multiple taxation, if you carry cow from Maiduguri or Adamawa, before you reach Port Harcourt, in a truck, you are going to spend about N250,000 just because of multiple taxation. This taxation is not vehicle taxation or animal taxation, but it is money collected illegally from our members.”
On The Part Of Government
Dr. Obi Nwakanma was not happy with the way government was imposing tax on the citizens, especially in Imo State.
Scrutinising the Governor of Imo State, Anayo Rochas Okorocha, Dr. Nwakanma wondered why the former should impose what he described as “a local tax of N3000 per adult in Imo State” in 2018. Nwakanma said that the announcement to this effect was made by the commissioner for Community government, Culture and Traditional Affairs, Mr. Louis Duru.
It was learnt that Okorocha christened the alleged taxation of his wards “Community levy.” Nwakanma said that while he was in support of any genuine taxation, but this was not of Okorocha’s type.
In his words, “Okorocha’s tax is the tax of the Caesars. It is forced and compulsory levy, and as Louis Duru puts it, every adult in all the Communities in Imo state have been “ordered” to pay it!”
Likewise, the Non-Academic Staff Union of Educational and Associated Institutions, NASU, Anambra, in December 2014 decried imposition of taxes on workers by some state governments and educational institutions.
Some Nigerian lottery operators on August 19, 2018, at the one-day Public Forum on the Operations of Lottery Industry in Nigeria held in Abuja, Mr. Chima Onwuka, Chairman, Lottery Operators Forum, called on the National Lottery Regulatory Commission for amendment to the National Lottery Regulation Act, decrying multiple taxation and incursion of the industry by unlicensed operators.
According to the Representative of People Empowerment Lottery Operator, Mr. Mobolaji Johnson, double taxation was a major challenge to lottery operators in the country.
For instance, “In UK there is no Value Added Tax on lottery business; recently in Ghana they declared amnesty on tax and one of the key things on the amnesty is that you don’t pay ‘Withholding Tax’," Johnson informed.
This was the same way members of NASU in West African Examinations Council, WAEC/Libraries and other trade group councils at their 2ndregular meeting in the Anambra state, also cast off “the purported abrogation of an existing agreement between WAEC management and NASU on deployment of serving officers of the union.”
Nwakanma later pointed out, “This failure of public governance in Imo State has created “Emperor Okorocha”, who can now “order” Imo people to pay tax or what he calls “community levies” without the backing of an appropriate act of the Imo State legislature to give force and legitimacy to citizens’ taxation.
“Taxation of citizens is founded on a state tax law, and the current laws in Imo State do not grant the government of the state the power to impose arbitrary taxes until such a mandate has been framed by the House of Assembly whose powers and essential duties is to determine the tax regime for Imo State, and provide the basis for its collection by the agency of the state empowered to collect tax, the Treasury department, or the Ministry of Finance as we know it.”
He went further, “On what basis, by which laws, and to what end therefore is the “order” by Mr. Okorocha to Imo citizens to pay a forced and illegal levy? There are three tax collecting levels of government in Nigeria: the federal government: the State, and the Local governments. Okorocha has virtually imposed an autocracy on Imo State by illegally appropriating the powers of local government without sanction or consequence, and in collusion with the Imo state House of Assembly...”
Representatives And Govts At Rescue?
Like a virus, the residents of the Federal Capital Territory, Abuja, were not singing Hosanna in the Highest; they were singing “God fight our battle” in the hands of tax collectors as they paid through their nostrils.
In November 2016, the House of Representatives was drawn to the plight of the residents and there was a swift reaction to their ordeal: a motion was adopted after it was moved by Hon. Emmanuel Orker-Jev.
This was the same way on August 19, 2009, the Lagos State Government was set with an enforcement team to eradicate and arrest touts who were moving about collecting tax from unsuspecting members of the public and acting as tax agents in the state.
This dubious behaviour was rampant at the local government level. The then Office of the Special Adviser on Taxation and Revenue to Governor Babatunde Fashola manned by Mr. Ade Ipaye was not pleased with the nuisance of illegal taxation in the state.
Ipaye bared the government’s plan at revenue illumination seminar organised by the Ministry of Local Government and Chieftaincy Affairs in collaboration with the Office of the Special Adviser on Taxation and Revenue, in Alausa, saying that a Bill had been presented to the state House of Assembly.
The Bill was expected to cage and regulate levies collected by local government councils when passed into law. Yet, all the efforts could not control touts having a field in illegal-taxation in the state.
The Reps asked residents to stop forthwith paying any tax or tenement levies till the issues were thoroughly put through. The Minister of FCT, Mallam Mohammed Bello was mandated by the House to handle the situation without reservation as the issue of multiple-taxation called for national emergency.
In the same vein, the then Governor Theodore Orji of Abia State in March 2014, suspended ad infinitum two commissioners for purportedly breaching government’s instruction against double taxation and extortion of money from people of the state.
In a statement by the then Commissioner for Information and Strategy of Abia State, Mr. Eze Chikamnayo, the commissioners’ names were given as Chief Chisom Nwamuo, Commerce and Industry; and Mr. Ikechukwu Emesiombum, Transport.
The heated governor went further to seal off the premises of Aba area office of the Ministry of Works, suspected to be the safe ground where the alleged extortionists perfect their acts christened illegal revenue collection.
Hence, Orji was bound for suspending all the unapproved revenue collections pending when his government harmonisation of taxes payable in the state would be completed.
The Reps also mandated its committee on FCT to investigate the illegal activities and determine why the perpetrators have been having field day, saying, “investigate this activity and determine why this has been illegally going on with the aim of bringing perpetrators to book and report back to the House within two weeks.”
This was even as the Federal Government on January 24, 2015 promised to amend the Taxes and Levies (Approved List for Collection of Taxes and Levies) Cap T2 LTN, 2004 in a bid to harmonise taxes and abolish multiple taxation of citizens across the country. It also directed the Inspector General of Police as at the time to dismantle all road blocks “mounted on the highways for revenue collection as they are illegal.”
The move was sequel to the complaints by the Manufacturers Association of Nigeria, MAN, followed by a report by Governor Ibrahim Dankwambo of Gombe.
Anambra, Lagos and Rivers were amongst the states outlined as where residents were over taxed through duplication of taxes or levies on the same item or services.
"Although only 20 forms of levies or taxes were approved by the Taxes and Levies Act, there were multiple-taxation of citizens in most of the states across the country with Rivers, Lagos and Anambra topping the 17 states and Abuja, which were listed," said the report.
As if that was not enough, on April 16, 2012, Fashola was represented by the Special Adviser to Lagos State Governor on Tax and Revenue, Mr. Abimbola Shodipo.
Fashola thrilled members of the Chartered Institute of Taxation of Nigeria (CITN) on professionalism in an array to curtail the illegal collection of taxes from residents of the state.
The then Governor of Lagos state made this known at the Investiture Ceremony of Mr. Samuel Olusola Agbeluyi as the 5th Executive Chairman of Ikeja District Society of CITN.
Hear Fashola, “Tax is the heart of every government. It is the main source of generating revenue for state or local government. I will also like to note that the kind of quality transition that took place today should transpire the policy for the betterment of the society”.
It was learnt that the reason for the illegal-taxation in Abuja was because the FCT Inland Revenue Service Board that was empowered to collect taxes in the FCT after it resolved this issue with the House, was lame-duck, a situation that threw the House in sad mood.
According to a source, “Taxes and tenement rates have been authorised by Acts of the National Assembly, that is, the taxes (approved list for collection) Act and the FCT Internal Revenue Services Act, 2015.” But this seemed not working.
Against this backdrop, Hon. Orker-Jev while moving his motion frowned that some elements in the society took advantage of this to defraud the citizens in the name of tax collections through forceful and arbitrary means by forging government documents and molesting their victims with the promise that defaulters would be thrown into prison.
However, while speaking in October 2016 in Washington, at the end of the World Bank/IMF meetings, the then Finance Minister, Mrs. Kemi Adeosun, the Governor of Central Bank of Nigeria, Mr. Godwin Emefiele, in a joint press briefing, said that $1trillion taxes illegally taken out of Nigeria to be repatriated given the agreement reached by a Nigerian team with the UK’s Dept for International Development, the US Treasury Department and others.
Illegal Revenue Roadblocks Dismantled
The Honourable member of the House, however, articulated apprehension, saying, “This act portends an affront to the FCT Inland Revenue Service Act and Tax Laws of the Federation and is aimed at defrauding the unsuspecting members of the public in these days of recession.”
But just when the Reps were unease of what the Abuja residents were passing through in the hands of supposed illegal tax collectors, Benue State Government reportedly dismantled over 159 illegal revenue roadblocks.
The story was not different in Ebonyi as government was urged on September 12, 2018, by some organisations like the Movement for Greater Ebonyi led by Mr. Silas Nworie, to prosecute illegal tax collectors.
Hear Nworie, “Before the suspension of the illegal levies, many prominent Ebonyi indigenes had begged the state government to stop the activities of those extorting money from innocent Ebonyi residents in the appearance of taxes and levies. But all pleas fell on deaf ears.”
It was in September 2018, and the Benue State Internal Revenue Services, (BIRS), discovered that millions of naira had been lost to perpetrators of the illegal revenue road blocks.
Meanwhile, on May 16 2015, the Chairman, Edo State Internal Revenue Service (EIRS), Sir Oseni Elemah, while at the Annual Tax Conference (ATC) organised by the Chartered Institute of Taxation (CITN) in Abuja, said 80 per cent of taxable Nigerians had not yet keyed into Taxpayer Identification Number (TIN) developed to boost the Nigeria’s tax system.
The Chairman, Benue State Internal Revenue Service, Terzukwe Atser, was worried that upon the dismantling of the illegal road blocks, operators flaunt the order using the night as cover.
Nworie continued, “It is shameful that the government could be condescending. Ebonyi people cannot be deceived. What should be done now is to urgently arrest and prosecute those who extort money from people.
“We learned that the perpetrators were carrying out the instruction of higher authorities. People were forced to buy what they called environmental basket for N8,000, without considering whether they had the money or not.”
Notwithstanding, Atser added that what the government had done, yet some of the people were operating in the night and they were always on the run because security agencies were after them.
Hear Atser, “In taxation, we work according to the laws and obey the law. You have to be just and fair. Therefore, in Benue State, we want to now build efficient tax administration that would rise to become the best in Nigeria and in achieving this, we need to train and retrain the tax managers so that they can translate the knowledge to other staff.”
The Rivers State Internally Generated Revenue Service, RIRS, on November 13, 2018 boasted through its Chairman of RIRS, Mr. ThankGod Norteh, that it has got a technology that would dismantle the illegal collection of taxes in the state, adding that the technology which would be put into use in January 2019, would serve the purpose.
Yet, the news of illegal taxation in the state and across the country has not stopped. The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), had on May 19, 2010, proposed for a fresh stakeholders meeting of tax authorities in the country (Federal Inland Revenue Services (FIRS), States tax authorities, and the Organised Private Sector to address multiple taxation issues.
Odimegwu Onwumere writes from Rivers State. Email: [email protected]