Businesses in Rivers, Enugu groan, pay 75 official charges, taxes

• Edeoga urges Mbah to review state’s tax regime 

A report released by Stakeholder Democracy Network (SDN) and its partners has exposed the crippling effects of multiple taxation on businesses in Rivers State.
  
The study unveiled at the weekend, reveals a staggering 75 official charges applicable to businesses, with 17 of these appearing to be multiple taxes.

According to the Research and Policy Manager for SDN, Alexander Sewell, the research carried out in March 2024, paints a grim picture of financial strain and operational difficulties faced by businesses.
A whopping 65 per cent of businesses believe they pay multiple taxes, while 57 per cent have been harmed by tax collectors.
  
The situation is further exacerbated by aggressive tactics employed by tax collectors, resulting in one-fifth of reported physical attacks, one-fourth of claimed property seizures, and one-sixth of business shutdowns.  

Young people and women are disproportionately impacted, with two-thirds of businesses in the state reporting multiple taxes. The study shows that businesses run by individuals below 35 years are more likely to be forced into paying multiple taxes (64 per cent) than those run by older individuals (55.6 per cent). Similarly, female-owned businesses are slightly more likely to pay various taxes (67 per cent) than male-owned ones (64 per cent).

Sewell noted that more young people spend over 31 per cent of their income on taxes compared to those over 36 years old (16 per cent versus seven per cent of the sample population). This means that young entrepreneurs pay a significant portion of their hard-earned income towards taxes, leaving limited resources for growth and development.
  
Despite successive federal and state government administrations pledging to address the issue, the study reveals a lack of tangible progress. Committees established to assess the situation and make recommendations have failed to yield meaningful reforms.

SIMILARLY, the candidate of the Labour Party (LP) in the 2023 governorship elections in Enugu State, Chijioke Edeoga, has pleaded with Governor Peter Mbah to exercise discretion in the imposition of taxes on the people.
Edeoga, who accused the state government of “multiple taxations,” appealed to Mbah to “have mercy on residents of the state” by reducing the tax burden that purportedly came into operation since the advent of the current administration.

In an open letter to the governor, titled, ‘Heavy and Multiple Taxes: Have Mercy on the People of Enugu State: An Open Letter to the Governor of Enugu State,’ Edeoga highlighted the multiple increases in taxes, arguing that such excessive tax regime has led to the deaths, frustration and the flight of businesses from the state.

“You have increased tenement tax for bungalows in Enugu metropolis from N30,000 to N150,000 per year. Tenement tax for high-rise buildings in high-density areas of Enugu metropolis increased from N50,000 to N300,000. Tenement tax for high-rise buildings in low-density areas of Enugu metropolis increased from N80,000 to N400,000. Land instrument/title registration increased from N70,000 to N300,000. Private school tax increased from N30,000 to N200,000 per year,” he said.

Edeoga appealed to the governor to reconsider his approach to taxation by factoring in the economic realities of the people, the ability to pay, and the future economic growth of businesses in the state.