Headline News Nigeria Special Report

Taxes, levies impacting businesses – Residents lament

One of the newly constructed roads around Okpuno, Awka South LGA of Anambra State, achieveable through tax payers money. Photo Credit. Alfred Ajayi / Radio Nigeria

Taxation is the imposition of compulsory levies on individuals or entities by governments in almost every country of the world.

It is mostly used for revenue generation by the government, though it can also serve other purposes as well.

However, this legitimate duty has become a source of hues and cries since the current administration in Anambra State in to power.

Some citizens who shared their views with Radio Nigeria described the increase in taxes, levies and charges by the Soludo-led administration, as ill-timing, given the unfriendly economic condition in the country, which has plunged many residents into hardship.

Correspondent Alfred Ajayi, who went round major cities and markets within the Anambra State metropolis samples citizens opinion on the development.

It was 7:30am on Thursday, 16th February, 2023 and as usual, John Okoro was already at his laundry shop at Okpuno, Awka South Local Government Area of Anambra State, to begin the day’s business.

John, who has been into laundry business for almost five years, has never experienced difficult situation than now.

He lamented that “The economy is very bad with epileptic power supply and hike in prices of goods. I have machines and pressing iron which need constant power supply as this enable me make more profit”.

“Now that I buy fuel at the rate of N450 naira, it affects the business. We also pay for electricity that is not always supplied, due to estimated billing. I now work like elephant and eat like an ant,” he lamented.

Beyond the enumerated challenges, John sees the tax regime of the current Anambra State administration as a tough situation. “The state government imposes too much tax on us. During the past administration, we paid N2000 for environmental, Business permit wasN1500. Now, environmental is N4500 while business permit is N7000”.

“After removing the money for fuel, electricity as well as taxes and levies, you discover you are working for the government,” John remarked with disappointment. “It is affecting me badly. I am not making profit like before. The last time I bought fuel of 1500, I could not even use it to make profit of 2000”.

Like John, Felix Ndu (not his real name) who deals on male and female shoes, believes that the business atmosphere in the area is unfavourable. “We are talking about naira scarcity, fuel scarcity, inflation, and sky-rocketing prices of items.

Yet, we are asked to pay twice of what we have been paying before. Any reasonable and compassionate government would have considered all of these”.

“During the previous administrations, their tax system and mode of enforcement was not detrimental to the people and their businesses. But presently, the taxes are higher and the mode of enforcement is not civil as it is done by touts.

Peter plies his trade within the popular Eke Awka market selling home and kitchen utensils. He could not understand why those elected by the people turn against them afterwards. “During the time of Peter Obi, we were paying N2500. It later rose to N5400 and later to N8000.

From N12,200, this professor has increased it to N14,200. “If anyone tells you that this government is favorable to him or her, the person is working for the government,” Peter concluded.

Onitsha is not better

Julius Obi, a small scale entrepreneur in Onitsha, the commercial nerve centre of the state, said “Honestly, the issue is mind blowing. “They keep bringing papers demanding payment and before you arrange yourself to pay, you see hoodlums coming to embarrass people. For you to struggle with the little you are earning to settle all these things, taking care of the family is even a problem”.

in the case of John who hails from Ebonyi State but owns a provision shop along new market road Onitsha, said he also finds the tax system suffocating.

According to him “The tax dey too much o. If I see something weh I go fit do comot for this Anambra, I go fit do am. The money you dey make for Anambra, na inside Anambra you go spend all of them. You no go fit achieve anything,” he narrates.

Nnewi not exempted

Nnewi is fondly referred to as the “Japan of Africa” for hosting many manufacturing companies including: Innoson Vehicle Manufacturing, (IVM), Cutix Plc, Ibeto Group of Companies, Chikason Group of companies and Coschris Group.

On the contrary, Dominion Udorji, an entrepreneur based in the city,, submitted that “Tax is good. It’s for the development of the country. We have been paying it without grudging. But, Soludo just came and increased everything. Now, to off load your goods, you pay N30,000, to move your goods, N30,000”.

“From Nkwo-Nnewi here to another point, they will charge you high because they pay N1,500 every day to the government, I put all the payments on the goods I sell. And when the prices are too high, people don’t buy. It reduces my profit”.

Udorji, regretted that the Governor did not fulfill his promise to end touting. “Instead, he just refined it, changed the name and empowered the same old touts against the masses. They come and are ready to fight you to death. They don’t care how you survive with your family”.

The situation in Nigeria generally is not encouraging for startups. But, whether encouraged by the government or not, people are determined to succeed”. Taxation is a lawful citizens’ obligation, All the respondents are unanimous about the critical place of taxation in government’s revenue generation efforts.

That position was strengthened by an economic expert and immediate former Dean, Faculty of Social Sciences, Nnamdi Azikiwe University, Awka, Uche Nwogwugwu, who explained that “Apart from being a civic duty, government needs tax to accomplish some of its set goals.

Another one is the economic reality in the country. For instance in Nigeria, the oil money is dwindling and there is an increasing need for internal generation of revenue”. Collection and administration of taxes are regulated by several laws at all levels of governance in the country.

Such laws, which are amended periodically, establish the administrative body, specify jurisdictions, and impose tax at a predetermined rate on specified income, profit, gain, and value of transactions of taxable persons.

In Anambra, the Revenue Administration Law 2010 empowers the state Internal Revenue Service to assess all taxable persons in the state as well as collect, recover and pay to the designated account any tax due to the state government.

The service is equally empowered to examine and investigate tax fraud and evasion with the assistance of law enforcement agencies. According to section 59, any person who fails to pay any tax, levy, rate, charge or other revenue due to the state or a local government authority in full is guilty of an offence and shall be liable upon conviction to a fine of 1% of the total amount of the revenue which was due and payable for each day of default and imprisonment for six months.

Despite these legal provisions, tax payment and collection have brought the government and citizens on war path as citizens alleged that government’s revenue drive is at the expense of their economic survival.

However, the Chairman, State Internal Revenue Service insisted that no government could survive without taxation. He rather recommended strict enforcement of extant laws even as he pleaded for the understanding of the populace. “I tell you – those laws when properly applied would increase revenue generation and increase the pace of development.

Taxation ensures that the man or the woman in the society is fully involved in the running the government”. There are yet exemptions Following state-wide outcry against the tax policy of this administration, Governor Chukwuma Soludo four months ago exempted the wheelbarrow pushers, vulcanizers and other petty hawkers from the tax net.

The Governor also in January 2023 suspended taxes imposed on heavy duty vehicles for loading and offloading reducing it to N15,000 monthly payment, for tricycle riders N10,000 while shuttle bus drivers now pays N12,000 as against the previous N25,000.

Also, they are now permitted to pay weekly instead of the previous monthly payment system. Similarly, motorcycle riders are to start paying N1000 per week or N4000 per month, while taxi drivers would be paying N3,000 per week or N12,000 per month.

“It is true that the government requires funds. Because no society can develop without people paying taxes,” Prof. Soludo remarked during the interactive session with transport operators and other key stakeholders. “To make the system more equitable, we are working on comprehensive tax reform”.

Whatever the situation; clamour for reduction of ‘ tax burden’ has been sustained, especially by those not covered by the recent downward review. There has been divergent views on whether the state government effectively utilized tax payers’ money or not.

Felix and Peter submitted that .“March 17, the governor marked one year in office. And the promises given to us ab-initio, were yet to be seen. The tax is working slogan is a mere expression. We are yet to see it in practical terms,”

“I have not seen anything they are doing. Personally, I can’t clap for the governor. I advise them to get their priorities right. There are many things to work on,” he hinted.

However, the chairman, Anambra Internal Revenue Service, Mr Richard Madiebo, disclosed that there is now a linkage between the taxes and development in the state. “Over two hundred and seventy kilometers of high quality roads are being constructed across the state. So, as more taxes are paid, we are fitting into Mr Governor’s plan to take care of all infrastructure deficit”.

“Five thousand teachers were recently employed and the security architecture is being strengthened to keep our people safe. These are done with the tax money. In some of the on-going projects, you now see a signboard with inscription – ‘Your tax is working for you, the solution is here’.

This is to establish the link between the taxes paid and the development strides of the government”. Mr Madiebo argued that payment of taxes gives the citizens a sense of ownership, which triggers progress and development of the state.

The Chairman of the state Internal Revenue Service also spoke on plans to streamline all taxes, levies and other charges by the state government. “Instead of paying for signages, wastes, trader’s tax and others separately, we are planning to harmonize everything so that citizens pay once and for all.

Political Implications

Julius sees the public perception of the administration as impacting negatively on second term bid. “Well, I am not a politician. But, my one vote makes the difference. If they can change, nothing stops them from enjoying a second tenure. But, if it is like this, I don’t think their coming back will be of any good to the people”.

A member of Governor Soludo’s party, the All Progressives Grand Alliance, anonymously buttressed Julius’s position. “It is visible to the blind that this governor will not rule Anambra twice”. “I will advise him not to come out again. The suffering is too much and he doesn’t want to hear the cry of the masses.

The Governor, Professor Soludo made a promise at the inception of his regime on March 17, 2022. “Every penny in our hands, we will show the value to ndi Anambra (Anambra citizens). As revenue comes in, we keep awarding contracts for more road construction because we have a road crisis which we are solving.”

One year down the line, visit to some communities across the state reveals that massive road construction is going on, especially within Awka, Okpuno and environs. While the government swiftly attributes its infrastructure interventions to the level of cooperation it has enjoyed from the citizens in terms of tax payment and calling for more.

Meanwhile, the citizens are insising on downward review of taxes and levies to increase the level of compliance and reduce the economic burden on them.

Will the Governor heed to the call of the masses? especially for political expediency? Only time will tell.

Reporting by Alfred Ajayi ; Editing by Julian Osamoto