A new report by SBM Intelligence, a Lagos-based geopolitical risk analysis has confirmed that Nigerians are paying multiple taxes.
Multiple taxations occur when various unlawful compulsory payments are collected by the government without appropriate legal backing through intimidation and harassment of the payers.
According to the report titled, “Under the Hood, A Look into Taxation in Nigeria’s Informal Sector,” informal businesses which appear to be outside of government regulation and taxes are confronted with multiple layers of tax collectors who are backed by government agencies.
“Multiple taxations are recorded across all the business types. There was no business group that had not experienced multiple tax collections by different groups. More so, the process of these tax collections are arbitrary, backed with violence, and with record spans that do not exceed one day,” the report stated.
In 2018, during a session with the federal executive council, Babatunde Fowler, the former chairman of the Federal Inland Revenue Services (FIRS), restated that the country does not really have a situation of multiple taxation.
“You only have multiple taxation when you pay the same tax to different tiers of government. What we have found out is that a lot of people categorise any payment to the government as a tax,” Fowler said.
Data from the report was collected through a survey research method. A total of 999 respondents were selected for the study from nine states namely Anambra, Bauchi, Cross River, Delta, Kano, Lagos, Oyo and Rivers, and Nigeria’s Federal Capital Territory (FCT).
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The main categories of informal business participants covered in the survey were open market traders, bus drivers, dressmakers, okada (motorcycle-taxi) riders, hairdressers, and vulcanisers (tyre-patchers). These occupations constitute the bulk of informal businesses that have daily interactions with consumers.
A breakdown of the report shows that 45 percent of the respondents pay on a daily basis which is the most prevalent payment time- frame, followed by 33 percent of respondents who pay on a yearly basis, 17 percent pay on a monthly basis while five percent paid on a weekly basis.
Also, the payment time frame differs by business type. Businesses like that bus drivers and okada riders pay most of their taxes on a daily basis due to the fact that they are mobile, with no specific office or address than businesses that are stationary, while most dressmakers, hairdressers, and vulcanisers made their payments on a yearly basis because of the stationary nature of their businesses.
One of the respondents, an okada rider in Surulere, Lagos, explained why he pays more taxes than some of his colleagues. According to him, different areas have different “lords” and tax collectors and your tax covers only a part of the town, if a trip takes a rider away from the area his tax covers, he has to pay another tax to avoid harassment and being limited to a particular area. He pays multiple area taxes.
