Home > Latest News > N45bn IGR Target; El-Rufai Imposes Tax On Akara Sellers, Tomato Hawkers

N45bn IGR Target; El-Rufai Imposes Tax On Akara Sellers, Tomato Hawkers

With the increasing reduction in federal allocation to states as a result of dwindling revenue from oil, Kaduna State Government has expanded its revenue generation drive to capture both petty traders, artisans and menial workers.

The new tax system would see the small retail businesses such as beans cake fryers, tomato sellers, peppers hawkers, roadside indomie cookers and vulcanizers paying taxes.

Kaduna State is facing serious security problem. It is now a safe haven for kidnappers, rapists, armed robbers, and violent religious activists, with security experts decrying increasing spread of unlawful dangerous weapons.

In the past few months, military officers, pastors, businessmen, children and others had been kidnapped, raped and killed, further stifling business environment and opportunities in the state.

According to the eye-catching lists for the revenue drive soon to be embarked upon by the state, anyone who fails to pay tax would face certain jail term.

Mallam Muktar Ahmed, Executive Chairman of the Kaduna State Internal Revenue Service (KADIRS), said petty business sellers would make their payment based on what he called “presumptive tax”, meaning according to the size of their business and sales.

But this has no legislative backing and might as well be subject to criticism and condemnation.

Sensing the impending crisis, the state government through its revenue agency has been meeting with unions and business groups. The union groups have not accepted the proposal and have said they would resist any flagrant and inimical tax payments.

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Kaduna has also seen a flurry of anti-labour activities from the state government, which the organised labour has accused of owing several months of salaries and clandestine move to dismember them. They are preparing to embark on strike to press home their demands.

Mallam Ahmed said N20 billion was being targeted to be generated from the MDAs, in a predominantly high level of unemployment while N25 billion is targeted to be generated from the state internal service.

“It is no longer news that the dip in the nation’s oil earnings has affected allocations from the federal account,” with the state depending on oil money to about 95 per cent, according to National Bureau of Statistics.

“This scenario has been on for months foisting a serious crunch on federal, state and local government allocations.

“Consequently, it has become pertinent for states to take on the issue of Internally Generated Revenue seriously as it is the only way to cushion the effects of falling federal allocations and for states to be self-sustaining,” he stated.

The governor had set up a committee headed by Mrs. Ifueko Omogui Okauru, one time Executive Chairman of the Federal Inland Revenue Service (FIRS) with the mandate of reviewing the tax and revenue generating mechanism in the state in order to widen the tax net and also collect all potential revenues within the state.

‎The KASIRS Chairman said: “The committee submitted its report in August 2015 and based on the recommendations of the committee and in recognition of the need for legislative empowerment of the state Board of Internal Revenue, an executive bill known as the Kaduna State Tax (Codification and consolidation) Law, 2016 was sponsored and passed by the Kaduna State House of Assembly and assented to by the governor.

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“The Law establishes the Kaduna State Internal Revenue Service and seeks to consolidate all taxes payable in the state in one law and in one document,” he said.

Mallam Ahmed said the law “prohibits the collection of cash revenues and‎ automates the operations, harmonises and centralises all revenue collections, simplifies payment‎, introduces investor friendly tax code‎, promotes transparency and accountability, eliminates multiplicity of taxes,‎ encourages voluntary compliance,‎ ensures improved and professional service delivery, provides taxpayers with information on precise taxes payable.

“We will enforce non-cash collection in all revenue offices across the state; ‎we will also enforce the adoption of genuine third party insurance across the state,‎ entered into an arrangement with interswitch to facilitate the deployment of 100 PoS terminals in addition to the existing ones in preparation for expanding revenue collection across the state.

“We will set in motion the quick recovery of tax liabilities amounting to N12 billion by undertaking recovery drives to selected Federal Government institutions where we parleyed with the management of the institutions,” he stated.

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He further explained: “We have met with over sixty trade unions and associations with respect to reaching a mutual agreement on rates that will be charged their members under the presumptive tax regime. We have also held talks with IT companies in preparation for full automation of the service.

“Discussions are also ongoing with banks to set up kiosks in revenue collection centres across the state. We have directed the 23 local governments and MDAs in the state to immediately implement the new law especially on non-cash revenue collection. Plans are ongoing to create codes for revenue lines under Local Government Councils.

“We have in collaboration with Interswitch brought the Kaduna State Water Board billing system onto the pay direct system and are working to interface their billing system with the platform.

“We have also deployed PoS’ in all government hospitals across the state; this is in order to stop cash collections of bills and to ensure proper charging and payment of bills.

“We are also currently working with Messrs Compliance Professionals Plc to restructure both the staffing and operations of the service to attain the highest level of efficacy.”

According to him, the mandate was to place the Internal Revenue service to a standard at par with global best practices in tax administration.

He added: “With the support of the good people of Kaduna State we shall achieve these lofty goals and together make Kaduna State great again.”