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Tax war in Ebonyi

In Ebonyi State, there has been an increase in Internally Generated Revenue IGR) driven by the state government which has put business operators in small, medium and big enterprises on their toes in order to meet up and pay them to avoid closure of their businesses. Many who can’t meet up with the payments have already closed their businesses. In the state, operators of small and medium enterprises are made to pay the sum of N14, 000 annually to the state government and between N4, 500 and N6, 000 to the local governments where their businesses are situated.

Property/tenancy rates

There is also what the government called property/tenancy rates where land owners and residents are made to pay particular amounts depending on the size of their lands/buildings. The government recently stepped up collection of such taxes from all landowners in the state. There is already a memo to that effect tagged “memo on ground rent collection from state and private landowners with Certificate of Occupancy(C-of-O). This was disclosed by the state’s Commissioner for Information and State Orientation, Uchenna Orji while briefing journalists on the outcome of the executive council meeting.

Orji said: “EXCO considered a memo seeking to as a matter of urgency embark on aggressive revenue collection of the ground rents from all landowners in the state who have not been complying with the law from the date of issuance of their C-of-O. “Exco approved the same and directed that from the year 2000, all those who have not paid their ground rent must pay it within 30 days from July 1, 2022.

Late payment shall attract a 20% penalty while failure to pay shall result in the revocation of the C-of-O of the land and the same shall be gazetted and published.” The government’s aggressive revenue drive has led to the shutting down of some commercial banks and other business centres. Last week, the government shut down one of the commercial banks in Abakaliki, the state capital, (name withheld) over its inability to pay tax.

Bank shut

However, the amount of money owed as tax to the state government was not disclosed but a close source from the board said the bank owes over hundred million naira to the state government. The bank was busy carrying out its business transactions when the tax force team from the state’s Board of Internal Revenue Service visited the bank and ordered for its immediate closure.

According to the leader of the team, Okoro Celestine, who is the head of Integrated Revenue, Ebonyi State Board of Internal Revenue Service, he explained that they decided to seal the bank over its inability to respond to demand notices to pay accumulated tax, adding that they sought for court order before coming to seal the bank.

He explained that several demand notices have been served to them from January 14 till date, but they were unable to clear the tax. “The reason why we sealed the bank was that they have not been paying their taxes and levies which have accumulated. “`This is not the first time we are coming here, several demand notices have been served to them from January 14, 2022 till date, and we have a procedure, we don’t just come and seal. A court order has been granted for us to come and seal it.

Snubbing warnings

“First demand notice was given to them; a reminder notice was also given to them but they refused. We don’t have any other option; we are not going to fight them other than to do the needful by seeking court order to seal them. “We feel that it is very necessary for it to be sealed today. We are not going to unseal it, until they comply. We don’t just start this journey today, it has been from January till date which is seven months,” he said. All effort made to get the reaction of the bank manager proved abortive as he declined to speak over the matter. In the metropolis, small business operators have lamented the tax policy of the government which they described as ‘unbearable’.

SMAs lament

They said the policy has adversely af-fected their businesses. One of them, Mrs. Oroke Maria, who sells sachets of water in bags along Old Enugu Road, said she was considering closing her shop as according to her, she can no longer cope with the tax policy of the government. “My brother, things are becoming harder for me.

I want to close this shop because of tax. You know this is the rainy season and water business is not always moving the way it normally moves in the dry season. Despite this, tax people have been disturbing us a lot. “The state government is collecting N14, 000 annually and the local government is collecting N4,7000 annually too and what is in my shop is not even up to these amounts.

Every day, the tax collectors will be disturbing us, chasing us around and carrying our properties to their offices. And if they carry your property to their office, you must pay the tax and pay a penalty before the property will be released to you,” she said. Another woman, who sells beverages around New Kpirikpiri Market, Abakaliki, also lamented the tax policy of the government.

“I am not finding it easy o my dear. Tax people don’t allow us to sell our things. each time you are in your shop, tax collectors will come and ask you to pay tax and if you don’t have it, they will carry something substantial in your shop to make you to come for it in their office and when you go to their office, you must pay the tax and the penalty they will charge you before they will allow you to carry that your property back to your shop.

This is what we pass through and many people who can’t cope with this situation have closed their businesses. “We pay these taxes in two types; state and local governments. The state and local government collect separate and different amounts. They always give us paper containing the amounts and bank details the taxes will be paid. If you have money when they come to your office and if you don’t want them to carry your prop-erty to their office, you give them some amounts and beg them. They will leave you and still come back to your shop after some time and demand for the payment of the tax,” she said.

Heavy taxation claim

A former Secretary to the State Government, Professor Bernard Odoh, has alleged that there is heavy taxation in the state. Odoh, who is the governorship candidate of All Progressives Grand Alliance (APGA) in next year’s general election in the state, said the heavy taxation was driving business investors out of the state.

At a press conference in Abakaliki and unveiling of Dr. Nkata Chukwu as his running mate for the 2023 governorship election, Odoh further alleged that many businesses have closed in the state because of multiple taxation. He noted that the state was ranked 34 out of 36 states as states that are hostile to businesses. Odoh who was Ebonyi SSG during Governor Dave Umahi’s first term said: “In the ease of doing business, we are ranked 34 out of 36 states which means this environment is very hostile to business. We must make Ebonyi State to rank the top states in the country in ease of doing business.

That way, investors will begin to come into Ebonyi. “Last time, we passed Onwe Road to Mile 50 and the entire city was shut down, there is no economy here once it is 6p.m. “The taxation here is terrible, many people are no longer comfortable doing business in Ebonyi, and many businesses have closed. We must balance the taxes with the incentives to business owners.

“If we don’t encourage SMEs and businesses, doing business here with less harassment, less taxation, we cannot play host to business owners and if we can’t play host to business owners, investment here will continue to diminish and once investment diminishes, we cannot take them to our young people. So, we are committed to reversing that trend,” he stated.

 

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