Extortionist Economy: AMAC Officials Frustrate Businesses Through Shady Taxes

Extortionist Economy: AMAC Officials Frustrate Businesses Through Shady Taxes
ndic advert

In Nigeria’s capital city, Abuja, thousands of business owners are on the brink of financial failure owing to illegal and arbitrary taxes demanded by officials of Abuja Municipal Area Council (AMAC), YAHAYA UMAR writes

In recent times, the world economy has developed tremendously and this has been linked with activities of Small and Medium Scale Enterprises (SMEs), especially in developing countries.

Despite clear and unambiguous legislations that contain a list of fees and taxes to be collected, all tiers of governments, ministries, departments and agencies are involved in collecting taxes that are not within this list. Various names are coined for these multiple taxes.

https://aljazirahnews.com/wp-content/uploads/2021/06/cbn-keep-the-naira-clean.gif

Introducing taxes that are not backed by laws to investors because of the apparent profitability of their businesses and the attempt to increase revenue base is like shifting the goal post after the ball has been put into the net. This may lead to disinvestment.

The issues of multiple taxes on the same goods and services by different organs of government have now become a disincentive to business and commercial activities. Payment of normal taxes in one part of the country on goods is not an assurance of not paying similar taxes on the same goods en-route its destination across the country.

Branded company vehicles that have advertisement taxes paid on them in one local government may be required to pay such taxes in all the local governments they are operating, even if moving across without any business being transacted.

Goods being transported from one state into other states are being taxed along states that these goods are traversing under various taxes by each state or local government. Herds of cattle from the far North are subjected to various types of taxes across the country before finally getting to their final destinations in the southern parts of the country.

Food items like pepper, tomatoes and yams are also subjected to various taxes across the route.

There may be up to 12 types of taxes to be paid on tomatoes and pepper from a distance of 12 kilometers before getting to its final destination. Various names were given to these taxes- agric tax, environment tax, pollution tax ad hoc tax, movement tax etc

Between 2019 and 2021, a stall has been charged up to a total of N1.2 million on yearly basis to get a certificate of fitness for continual habitation from AMAC on the property in Wuse. A breakdown of the tax payments shows he was charged N500,000 in 2019, N250,000 in 2020, and N450,000 in 2021.

Also Read:  Conspiracy Of Silence: Uneasy Calm Over FCT APC’s National Assembly Election

A certificate of fitness for continual habitation is issued by AMAC revenue officials yearly to commercial buildings in the area council as part of its periodic assessment of the sanitation of landed properties.

The Abuja Bye-Laws does not recognise a ‘certificate of fitness for continual habitation’ as a yearly tax payment, but AMAC revenue officials demand it. In Lagos State, the certificate of completion and fitness for habitation is issued once by the Lagos State Building Control Agency after completing a new building to ensure it complies with the state’s safety provisions.

There is no flat rate on the ‘certificate of fitness for continual habitation’ taxes charged by AMAC officials, but overtime, they indiscriminately assign figures without proper assessment.

Ogbonna resorts to negotiating with AMAC officials who would cut down the tax fee in exchange for a bribe as a form of compensation.

In July 2020, he received a letter of notice from AMAC stating his certificate of fitness was due and asked to pay N250,A000 within 14 days or risk having his property sealed. Ogbonna called the AMAC revenue officer whose phone number was on the letter -after haggling with the officer for a few minutes. They settled for an amount before money exchanged hands.

“Sometimes, AMAC enforcement teams can visit my office three times a week to demand taxes they imposed on us, and if we don’t comply by giving them money, they just ground our businesses to a halt”, he says.

Eventually, he deposited N150,000 into the FCMB bank account of Bridge Numerics Ltd, a technical partner with AMAC (Environmental Services Department) responsible for collecting taxes from sanitation levies in the council.

Ogbonna pays at least N2 million in taxes yearly to the Abuja Municipal Council alone. If he combines other levies his firm pays to different authorities in the council, it adds up to N2.5 million each year.

Despite Ogbonna’s tax obligations to AMAC, which puts his business on a tightrope, he says the local council has not accounted for the millions of naira he pays in taxes and levies.

“I don’t understand what AMAC’s specific duties are apart from collecting taxes because I have not benefited from the taxes I have been paying all these years, and my business is suffering”, he says.

Ogbonna’s experience is hardly unique among business owners operating in Abuja Municipal Council, as their businesses become stifled from paying illegal taxes and levies enforced by officials of AMAC.

Also Read:  Roberts Orya Eyes Govt House, Offers Blueprint For Devt Of Benue State

Nigeria is ranked 131 out of 190 countries based on the World Bank 2020 Ease of Doing Business report. The ranking measures the ease of paying taxes, protection for minority investors, access to credit, amongst other indices.

However, this reality does not reflect on business owners in Abuja Municipal Council, constantly faced with officials of AMAC enforcing illegal taxes that suffocate their businesses.

To investigate the illegal operations behind AMAC’s tax collection system and the regulatory failures that facilitate arbitrary tax rates slammed on business owners, our reporter went undercover as a last resort to hold officials involved in the act accountable.

Posing as a business owner asked to pay N500,000 to obtain a certificate of fitness for continual habitation from AMAC, our reporter sought to negotiate with an AMAC’s revenue officer to ascertain if he could waive off 50 per cent of the tax payment.

Nigeria loses about N100 billion every year to tax-related fraud, according to data obtained from the Human and Environmental Development Agenda (HEDA), a Nigerian-based non-profit that promotes transparency and accountability.

An AMAC revenue officer, whose phone number appeared on one of the notices sent to business owners in the council, was contacted on the phone. TrueCaller, a calling identification application, revealed his name as Pius Jaltha Betso. Pius said he could help reduce the tax payment. He arranged a meeting with the reporter to adjust the tax payment at AMAC’s secretariat in Garki, Area 11, Abuja.

After exchanging pleasantries, he asked the reporter to walk him to his car while enquiring how much AMAC had charged the reporter.

After listening to the reporter’s tale, who stated the initial tax payment of N500,000 was too high and wanted a reduced fixed price of N250,000, Pius requested the demand of notice on the property, which the reporter could not provide.

AMAC issues notice letters to remind business owners to pay taxes and levies before its enforcement teams shut their businesses down.

If you had brought the demand of notice with you, I would have reduced the bill for you right now from that N500,000 and say the bill has been negotiated to N250,000, and I will sign on it so that nobody will disturb you”, he said.

Pius explained how writing off taxes worked, saying that he would immediately issue the certificate to the reporter if he received the money. However, he did not indicate any interest to supervise the property in question.

“Assuming you have the money with you, I would have given you the certificate, but since you don’t have the money with you, then there is nothing I can do”, he said.

Also Read:  FCT Minister Apologises For Delay In Distribution Of Palliatives In Gwagwalada

He said the reporter could transfer the money to his GTBank account number bearing Pius Jaltha Betso or bring it for him in cash to his office at AMAC’s secretariat in Garki, Abuja.

According to 2020 data released by the Nigeria Bureau of Statistics (NBS), the Federal Capital Territory (FCT) ranks the second most preferred investor-friendly destination in the country, attracting $1.3 billion for the period under review.

However, the figure does not do justice to business owners operating in AMAC who are asked to pay arbitrary multiple taxes. They spend 34.8 per cent of their operating revenue on taxes, compared to 33 per cent in 2014, according to a 2020 World Bank Doing Business report.

Nuhu Ahmad, a fashion designer in Gwarimpa, had the same experience, he bought a motorcycle in 2020 to take his customer’s orders and send them faster. However, after registering the bike, AMAC tax officials confiscated it two months later for not paying for mobile adverts and signage fees.

After paying N18,000 to retrieve his bike in December 2020, officials of AMAC seized his motorcycle in February 2021 for not renewing mobile and signage fees for the current year. All his explanations fell on deaf ears. After doling out N16,000 to them, he stopped using the bike.

“It’s been challenging for my business to cope with the excessive taxes AMAC charges. It is a serious concern for me these days because we don’t know what to expect. I had to keep the motorcycle for my business to save unnecessary costs by AMAC”, Nuhu, the owner of Wamball Clothing, said.

Commercial businesses like Nuhu’s in Abuja Municipal Council contend with 15 different taxes and levies: Inspection/Certification fees, Land Use Charge, Mobile advert, Signage fees, Tenement Rate, Vehicle documentation Operational Permit, Sanitation Levy, Fumigation Levy, Fire Service, Parking Lot, Online Registration, amongst others.

President of the African Development Bank Akinwunmi Adesina, at the Federal Inland Revenue Service Tax Dialogue meeting in January, said Nigerians paid one of the highest implicit tax rates in the world.

Aljazirahnews


Tags assigned to this article:
AMACFCT