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Struggling bakeries burdened with multiple taxes, excessive regulations

By Gbenga Salau
02 January 2022   |   3:59 am
For members of Premium Breadmakers Association of Nigeria (PBAN), operating in Lagos has become a pain in the neck. For businesses that are mostly small scale....

For members of Premium Breadmakers Association of Nigeria (PBAN), operating in Lagos has become a pain in the neck. For businesses that are mostly small scale, the Breadmakers allege that policies of the state government and its agencies have been hampering their operations rather than aid growth, thereby gradually killing their initiatives and businesses. As a result of the hostile production environment, operational capacity, according to them, has dropped below 50 per cent, while staff retention as well as employment of more staff has become difficult.

The association said the stifling operating environment is made worse by the undue exploitation and inhumane oppression by various ministries and agencies of the state. They listed such ministries, agencies and parastatals claiming authority to monitor/oversee bakeries to include Lagos State Ministry of Environment; Lagos State Safety Commission; Ministry of Transport (State Carriage); Lagos State Environmental Protection Agency (LASEPA); Lagos State Traffic Management Authority (LASTMA); Lagos State Fire Service; Lagos State Inland Revenue Service (LIRS); Lagos State Emergency Management Agency (LASEMA); the 57 local governments and LCDAs in Lagos; and Lagos State Signage and Advertising Agency (LASAA). The various levies paid include, among others, yearly papers by LGAs/LCDAs; Daily Ticket toll (LGAs/LCDAs) and Mid-year Papers (LGAS/LCDAs).

A PBAN member, Mrs. Emem Aideyan, said persons from ministries, departments and agencies (MDAs) coming around to ask for one levy or the other not only obstruct free flow of operation, but also compound the operation cost, leaving nothing for profitability. “It is confusing and very frustrating for us. If we have a specific agency to relate with, it is better. They tell you that for doing business in Lagos as a bakery, you are expected to pay some fees and taxes. My bakery is three years old, and you do not want to know how many times we have fallen prey before joining the association and our eyes were opened to some of the realities on ground.

“We paid N180, 000 to a team led by one Otunba from Alausa; another unit came for fumigation, another for safety audit and we were billed N150, 000 each. Then, those from environment will come asking for like N200, 000. Incidentally, many in PBAN are professionals; I am a chartered accountant. These are people, who left enviable paid employment to be entrepreneurs. But all we have witnessed is frustration. It is even so bad that raw materials are expensive and the margins in the business are massively, negatively affected. So for us, it is so frustrating.

“The concern is, who is helping the bakeries? The banks are not helping, as the interest rates are not friendly. COVID-19 came and we applied for relief, but none of us got any support. When these things happen, we cannot even sustain our businesses. A lot of times, we borrow to pay these fees so that we can rest, because the next minute, they could come threatening to lock the bakery. So, we are not asking for much, we are just asking Lagos State government to tell us who to liaise with and the exact fees to pay, which should be realistic, taking into consideration the state of the economy and the market.”

Aideyan maintained that bakeries were not making profit, as the owners were bleeding, revealing that in the last one-year, so many bakeries have shut down because they could not cope with the running cost of the business. “Many are not talking about profitability, but sustainability; looking for ways to get the business running,” she said.

She added: “Then you have Vehicle Inspection Officers (VIOs) and Lagos State Traffic Management Agency (LASTMA). On two occasions, I lost products in my vehicle because VIOs caught one of my drivers. The guy pleaded, please issue a ticket and release the bus, so that I could supply bread. But the bus was impounded for two days and we lost everything in the bus.

“Just three weeks ago, VIOs also held our bus over speed limiter that was installed by an official from VIS office. The driver was arrested because they say it was not working. They parked the bus over night. All the customers that were to be supplied were stranded, as they could not supply their customers. We paid N20, 000 to get the bus out of VIS office in Surulere. It is so frustrating. Funny enough, these payments sometimes go into individual accounts.

“At the beginning of the year, I ensured all documents for vehicles I use for supplies were up-to-date. Yet, they will always come up with something just to collect money. It is all about money; they do not care,” Aideyan lamented.

Also speaking, a PBAN member, Mr. Cosmos Adebiyi, said the first experience he had was from the Ministry of Environment, when some persons came, demanding for some documents and approval. “I gave them money so that I will not be disturbed. That same week, another set of people came from the same ministry. And I complained that some people from the ministry came days back and the woman that led them explained that they do not know those who came as they were the rightful persons for the oversight. The woman gave out her number to call when anyone comes from the ministry for oversight.”

Adebiyi said any time his marketers were out, they often call that they have been intercepted by agents of government, especially council officials, who just flash identity cards. “As businessmen, we do not want to be disturbed to prevent losses, so we just give money. It is the same thing with the Policemen once they see bread in the vehicle. We try as much as possible to comply with regulations, as the association does not condone laxity on regulatory issues.”

Another baker, who pleaded anonymity, said he had received not less than 13 agencies of government coming for regulation. “The same agencies from local and state governments come at different times. And it is the same purpose for which NAFDAC and SON also come. The harassment from state agencies is becoming unbearable.”

He added that local council officials often accost buses meant for marketing and supply of bread, demanding about 15 papers, some yearly or half year. “If they stop the buses taking bread to different places, the buses are impounded and kept for hours. When the bread is sweating in the nylon, three days afterwards the breads get spoilt, which means huge loss.”

The President of PBAN, Mr. Emmanuel Onuorah appealed to the state government to establish or make provision for a single process for payment of the different levies and taxes, so as to ease business for the bakers. According to him, the recent protest by the association was after the state government failed to respond to the association’s plight, despite a complaint letter sent to Governor Babajide Sanwo-Olu detailing their plights, while seeking redress.

According to Onuorah, some of the issues threatening the survival of their business in the state are multiple oversight/monitoring of their businesses by numerous state ministries, agencies and parastatals on same or similar issues. He noted that most of the monitoring activities by the state agencies were also carried out by the National Agency for Food & Drug Administration (NAFDAC), Standard Organisation of Nigeria (SON), and Federal Ministry of Labour and Productivity.

He added that some of the state agencies carryout the oversight with threat and harassment. He also mentioned intimidation and harassment of drivers of delivery vans by agencies such as VIO and LASTMA as well as miscreants/agberos on the road. “There should be special protection for the premium bread making industry as a major employer of labour. We should be given priority to sustain the ecosystem of Lagos economy. The action of Nigeria Police towards our members in Lagos State is very scary and makes doing business in Lagos very unfriendly and hostile. They impound our delivery vans at will and park them in their stations without minding the fact that our wares are essential and perishable goods. The Police should do their job honestly and professionally.

Onuorah said he and his members wanted the use of one consolidated body that will oversee the monitoring of their business rather than different people coming for the same issue from different ministries and agencies of the government.

The PBAN president enjoined the state government to ensure that well trained VIO and LATSMA officers are the only ones deployed on the roads to put a stop to harassment and intimidation of drivers and distributors.

He also appealed to the governor to direct the Commissioner of Police, Lagos State, to prevail on officers to stop the harassment, intimidation and indiscriminate impoundment of delivery vehicle of members.

“It is our hope that you will rise up as usual to assist us remain in business while we continue to provide employment, livelihood and food for the teeming population of the state while also contributing to the revenue of the state through payment of our taxes and levies,” Onuorah said.

The Commissioner for Information and Strategy, Mr. Gbenga Omotoso, said the state government is looking at the issues raised by PBAN, especially those within the purview of the state government. He argued that the federal government could only tackle some of the issues raised.

Omotoso added that the state government is already working on having a committee with representation from the various MDAs to interface with the bakers when it comes to payment of levies, taxes and regulation.