There is more revenue in informal sector if…RIRS boss


* As Rivers prepares to launch tax drive in informal sector

By Codratus Godson

In Nigeria, workers and those whose incomes are within easy grasp of governments hardly escape taxes because the tax master takes his money before the worker. In this game, traders smile and artisans enjoy. In advanced countries, however, nobody escapes the tax master.

Now, Rivers State is set to get closer to all residents and citizens as far as tax is going to be concerned. The plans have been long laid out and the time is right now and ripe. The tax master is coming to collect from traders and other informal sector operators.


At last, the Rivers State International Revenue Service (RIRS) is set to move into the informal sector for tax collection. The RIRS expects to tap some into uncharted revenue territories to boost its IGR which at the moment hovers at N10Bn per month.

The executive chairman of the Service, Adoage Norteh, told newsmen in his office in Port Harcourt on Monday, May 6, 2019, that a lot of education needed to be pumped into the tax-paying public before actual collection begins.

He said informal sector tax collection is more difficult because not a lot of persons know that tax is for all. “Those who sell things (traders) do not believe they should pay taxes. They do not know that taxes are different from levies and dues which they pay for putting their shops out there. Instead, they call it multiple taxes. They do not care to know that workers that pay taxes from their salaries also pay other taxes when purchasing items, yet, they do not complain of multiple taxes”.

He said the RIRS is set to move into what people do, in peoples private businesses and trades. “In doing this, we are going to collaborate with the Ministry of Transport because of parks and other businesses that do with movement of people. If you use any portion of the roads, you pay for it. Some of the new roads are now looking old and dirty from misuse and poor sanitation habit. If we can’t stop you using our facilities, we tax you. There should be levies and rates for those who make use of our facilities for themselves alone such as stores, posters on public buildings, etc.”

Norteh said the RIRS in the past couple of years has achieved sanity in tax administration and has stopped harassment of citizens for tax.

On the rates to be imposed on the informal business operators, the executive chairman said the Service would be fair and would hold extensive meetings with trade groups, unions and associations on this matter to educate them and reason with them. “We, however, expect people to kick against this; but fairness is the key.”

He sees the IGR of Rivers State doubling in the near future if all those who should pay taxes could comply. “The informal sector is where the bulk of the taxpayers are and where the revenue is.”

Newsmen say that the RIRS in the past had eyed the informal sector and even designed a system to collect taxes and probably double the revenue size of the state. The take off of this project has always been affected by political crisis to this time.

On whether taxing traders and market people would not bring clashes with local councils and touts that have been ruling in these areas, the chairman said the law is clear on who collects what. “We curtailed touting and that is why we are to meet with the trade groups to strengthen procedures and clarify who does what. There is no touting in Rivers Revenue system anymore. We are running a professional revenue management service now. If we allow touts, it can rubbish all the work we have done in the past couple of years. It’s the duty of the business operator to know who is coming to collect any revenue.”

He admitted that markets are under LGA revenue management except one built by the state government. “Some governments can however build and hand over to a LGA to own and manage. In the city, markets built and run by the state government will be under the state’s revenue board but in Rivers State, the LGA and RIRS in a city need to collaborate”.

He went on: “Our cardinal principle is to ensure that taxpayers pay with ease. The business people should be vigilant against those trying to collect government’s revenue.”

On what his agency is doing to collect taxes in other areas such as capital gains, luxuries and hotels, Norteh said it is unfortunate that a lot of people seal property deals under the table and evade tax. He said hundreds of transactions are done every year without being registered and that luxury tax is still untapped. “We will be meeting with hotels soon to strengthen the collection system there. People are always afraid of tax. The tax people pay is very poor and the payers need much education.”

He admitted that annual returns filing has improved. “Before, it used to be about 5,000 filings, but it is now in hundreds of thousands. At least it is important to file, even if some had nothing to pay.  Those who have not registered in the system still have time to do so but they will not be allowed to collect tax clearance certificates.”

He warned the tax payers especially those coming into the tax net for the first time (informal sector people) not to dare pay cash to anybody. “We will provide point of sale (POS machines) to accredited collection agents who would pay deposits and collect taxes according to their capacities reflected in the amounts they deposited. You will not collect more than the deposit you paid.”

NDDC imbroglio

On the sealing of the headquarters of the Niger Delta development Commission (NDDC) for one week now due to N50Bn tax bill and the heat it has generated, the RIRS boss said the matter is in court and that he would not want to comment on it. He would not want to be drawn into why the NDDC may have broken the seal and opened their offices.

He rather said: “The tax master will have to collect his money. He will write you a letter or send you a notice. If you allowed him to examine your books, his assessment will be accurate, if not, he will use Best of Judgment (BoJ) method to send you a demand notice. If you do not accept his assessment, you provide evidence. If you do not accept and you do not submit superior evidence or open your books for assessment, it is assumed you have accepted the BoJ. Merely saying you object does not amount to an objection except it is backed by contrary evidence. The tax payer can say, see my own self-assessment or calculations or simply submit your books for examination.’

He went on; “The rule is simple. If you are not happy, you go to court. It is not a social media campaign. Gov Nyesom Wike has not asked me to go here or go there to collect taxes or to intimidate any person. It’s my duty to protect the integrity of a government that has not done such a thing from undue insinuations.”

He said if anyone uses force to obstruct an order of the court, contempt proceedings can be initiated against them. He said tax authorities have two ways to approach the court, either to seek an order to shut down the offending premises or to obtain an order to attach the assets and hand it over to the state government. If any taxpayer is aggrieved, he can go to court, not take the law in his hands.

BusinessDay gathered that the talks between the RIRS and the NDDC over the sealing have broken down and the courts may have to handle it.

Norteh, also a tax consultant, advised tax payers not to allow the tax master to come to their doorsteps first, saying it is advisable to do the needful early because when the tax master comes, you must answer him.

He said federal tax agencies do visit his private business and he files early and they meet to resolve grey areas. He said he has not used his position as a state revenue boss o block the federal counterparts.