Informal traders and commercial vehicle drivers in Nigeria have called on the government to implement a single, unified tax payment system to alleviate the burden of indiscriminate and multiple levies.
This proposal aims to address long-standing issues faced by roadside traders and drivers, particularly in Lagos, where unchecked taxation often leads to harassment and exploitation.
Currently, multiple levies are imposed at various checkpoints by both authorized and unauthorized collectors, causing frustration among the affected parties.
Amid growing concerns about Nigeria’s tax administration, stakeholders have voiced skepticism regarding the recently passed tax reform bills and their ability to tackle these systemic problems, which include corruption and inefficiencies in tax collection.
Challenges of Multiple Levies
Emeka Nwosu, a driver working with an interstate transportation company, expressed hope that the tax reforms would streamline payments across the country.
“We pay for tickets in Lagos, we pay at Benin bypass, and then again at the Niger Bridge among other places. Federal reforms should unify all these payments into one. Once paid, we should travel nationwide without harassment for additional fees,” Nwosu stated.
Similarly, Abdulahi, an onion seller at Lagos’ Mile 12 Market, shared that he pays N1,500 monthly to agberos (informal tax collectors) who demand daily levies of N50.
“They collect from anyone they come across—hawkers, traders—it doesn’t matter. If you refuse, they seize your goods. How much are we really making?” Abdulahi lamented.
An elderly woman selling Ugwu (vegetable leaves) described her ordeal, where she pays a daily levy of N50 or N100 to agberos and another N100 every Friday to KAI (Kick Against Indiscipline). She called for a government-supervised system to unify these payments and regulate agberos, who are often violent.
Tax Reform Bills and Public Skepticism
The tax reform bills recently passed by the Nigerian House of Representatives aim to modernize the country’s tax system and address critical gaps in compliance and collection.
- After extensive consultations and amendments by the House Committee on Finance, four key bills were adopted to improve economic conditions. These include measures to harmonize tax laws, streamline revenue collection, and leverage technology to reduce inefficiencies.
- Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, acknowledged that while the reforms may significantly reduce inefficiencies through technology, certain challenges remain.
“Human management of tax systems still leaves room for corruption and inefficiency. Enforcement, especially at the local government level, will be difficult due to non-state actors like agberos and local councils imposing illegal levies,” Dr. Yusuf explained.
Goodluck Ikporo, CFO and Co-Founder of Fixit45, noted potential struggles during the initial stages of implementation.
“Centralizing the process through the Nigeria Revenue Service may lead to bureaucratic complications, but constant taxpayer education and compliance mechanisms will help mitigate these issues,” he said.
The four tax reform bills passed by the House of Representatives
- Nigeria Tax Administration Bill (HB.1756) – A Bill for an Act to Provide for the Assessment, Collection of, and Accounting for Revenue Accruing to the Federation, Federal, States, and Local Governments; Prescribe the Powers and Functions of Tax Authorities; and for Related Matters.
- Nigeria Revenue Service (Establishment) Bill (HB.1757) – A Bill for an Act to Repeal the Federal Inland Revenue Service (Establishment) Act, No. 13, 2007 and Enact the Nigeria Revenue Service (Establishment) Bill to Establish Nigeria Revenue Service, charged with Powers of Assessment, Collection of, and Accounting for Revenue Accruable to the Government of the Federation and for Related Matters.
- Joint Revenue Board Bill (HB.1758) – A Bill for an Act to Establish Joint Revenue Board, the Tax Appeal Tribunal and the Office of the Tax Ombudsman, for the Harmonization, Coordination and Settlement of Disputes arising from Revenue Administration in Nigeria and for Related Matters.
- Nigeria Tax Bill (HB.1759) – A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks Relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions and Instruments, and for Related Matters.
What you should know
Once approved by the Senate and signed into law by President Bola Tinubu, the reforms are expected to enhance fiscal policies, eliminate multiple taxations, and optimize revenue collection.
- Advocates for the reform highlight the importance of transparency, the use of technology, and updated tax laws to address existing inefficiencies.
- Dr. Yusuf pointed to advancements in digital systems as key to curbing leakages and fostering accountability in the tax structure.
For informal traders and commercial vehicle drivers, a unified payment system could mark a turning point in their ability to conduct business without fear of harassment or exploitation.
The tax reforms, if effectively implemented, promise relief and improved economic conditions, but challenges in enforcement and corruption must be carefully managed to achieve the intended results.
