Desperation for internally generated revenue (IGR) & citizen ambush
Last week I had a taste of the renewed and intensified effort of the Lagos state government to increase its internally generated revenue. Lagos has long been acknowledged as perhaps the only state that can survive without federation allocation. I understand that Ogun state is strongly on the heels of Lagos. During the reign of Bola Ahmed Tinubu as governor of Lagos, very strategic decisions were taken to make Lagos financially viable and independent. The first was the Lagos version of the Land Use act called Land use charge, which compelled all land owners to pay tax on their property across the state. This was stoutly resisted especially by the organized Private sector, leading to court cases. It was eventually resolved in favour of the state, following government’s agreement to reduce the tax rate. Today this has become a major source of revenue for Lagos. So what oil should be for oil bearing states is what land is for Lagos!
Then there was the sales tax, which again was fought by the business class, largely because it was seen as double taxation. People who paid VAT were being asked to pay additional sales tax. Again, after a long battle, the matter was settled in favour of the government, following its agreement to restrict the sales tax to ‘luxury’ items like hotel accommodation and alcoholic beverages. Governor Fashola consolidated all these additional taxes on the Lagos residents and Lagos is swimming in revenues. Then enter Akinwunmi Ambode, former permanent secretary, former accountant general, and the noose is tightened on Lagos residents. Ambode’s focus seems to be on expanding the income tax net to get especially the informal sector employees in. And is he doing a good job? You better bet!
My personal driver was assisting our pick up van driver (who was also in the van) to deliver some item to somebody in the Gbagada area of Lagos. He was stopped by some guys called VIOs (Vehicle Inspection officers, I believe). They asked for the drivers licence and he showed them. Then they asked for his Lagos state driver’s licence, which is different from the national driving licence. My personal driver said he did not have. But the official van driver stepped up to show his own, but he was told he was not the driver of the van at the time of the ‘arrest’. The VIOs took over the van and drove it to their premises on Ikorodu Rd. On arrival, they were issued a ticket for twenty thousand Naira. They begged but the guys will not bulge. As I was not in the office, they called me to narrate their situation. I asked them to sort themselves out. The van slept in their yard on that day. Then they came to collect the money from me where I was attending a meeting. I was livid. Eventually I bulged. They went to pay, and they were told to go and pay ten thousand Naira in the bank and pay ten thousand Naira in their office. As they went to collect the van after paying the fine, my driver was told that he had to go and obtain the Lagos state driver’s license before they would release the car. Before he reached me to collect money, it was late and so the van slept in their yard on day two.
On day three my driver went to get the special driver’s licence and by the time he was through with that, the day was over. So on day four he returned to the yard with his Lagos state driving license. Satisfied that he had paid the penalty and obtained the special license, my driver and the van driver were eager to take the van away to go and deliver stuff they have had in the van for four days. Rather than hand over the key, the VIO guys handed them over to the staff of the Lagos state internal revenue, who now asked for my driver’s income tax receipt. My driver protested that he had just started work in May and they told him that he had earned salary for two months and so he should go and pay his tax. As my driver was scratching his head in exasperation, they asked him to go and also get the tax clearance of the owner of the van as well. My driver called me, disrupting my meeting. I was angry and shouted at him. He later met me at the venue of the meeting. I then called my PA in the office to provide the tax clearance certificate to the driver to send to the tax people. My driver rushed there and presented the company tax clearance and they told him, what they needed was my personal tax clearance not the company’s, as the van was registered in my name. By the time my driver could get back to me, day four was over. Can anybody imagine how angry and frustrated I had become at this time?
On day five, I left my meeting venue and came back to my office, first to quarrel with my PA for giving the wrong tax document to the driver. Then, we began to search for my own tax clearance. We picked the tax clearance card and the receipt for the 2015 tax. We got back to the yard and first I was shocked when I was told that I only had the official revenue receipt of the annual one hundred Naira levy which I do not quite remember again what it is for. I protested that the receipt for my income tax paid for last year was attached. They eventually pointed to me that what I had was only a bank teller’s receipt to show that I paid some money into the government account but that was not the revenue receipt, that I should go the bank where I paid the money last year and collect the revenue receipt.
I lost my cool, and began an agitated introduction of myself, Past CEO, past Chairman, ex this and ex that. I brought out evidence to show that I had retired after 33years of meritorious service during which I diligently paid my tax (even if I did not have a choice as my tax was deducted at source) and that really I should not be paying income tax as a retiree. But because I am a God-fearing, law abiding citizen, I have continued to pay tax on my pension stipend and little other income from sundry sources. This bold effort at self promotion got the attention of one of the tax officers who then went online to view my tax history. He was impressed and showed me my tax history on their website. I was amazed. This Lagos people, they have gone beyond EKO for show to EKO for real! He confirmed to his colleagues that I had paid my taxes regularly up till 2015. I was relieved and expected to be released to go do something useful for myself as that was the last working day of the week. Alas a new chapter was opened!
“Oga, what of your 2016 tax?” I was stunned. “But 2016 has not yet ended, why is that an issue” I retorted, wandering how wicked these guys wanted to be. After just acknowledging that I have been faithful in paying my taxes, in or out of employment, why would they be asking for 2016 tax receipt. The guy who just checked my tax records on line calmly told me that 2016 tax was due on the 31st March and that if I had not paid up till then, then I would pay a fine in addition. I began to pray in tongues. I was asking God to calm me. What kind of ambush did I walk into? I then informed them that I had actually paid my 2016 tax. They said there was no evidence. Angrily I called my tax consultant, Ken to enquire what happened. Ken was angry and shouting on the phone that they had no justification to keep me waiting, that he was still processing my payment. I asked Ken to speak to them and after a 10-minute hot exchange, ken calmed down and began to plead with them as he could not win the argument and was embarrassed that I was in that uncomfortable situation. He struggled to send evidence to them that I had actually issued him a cheque in May and that he was processing it along with other jobs he was handling. It was only when they saw this evidence that they reluctantly allowed us to go, insisting that I must get my consultant to go and get the tax receipt on Monday and to call them to confirm. But did we go?
They issued us with a clearance and asked us to go back to the VIO people to collect a gate pass to allow us take the Van out. After waiting for about 10 minutes, the VIO gave us another bill requiring us to pay “demurrage” for 5-days parking! I almost burst my artery. You kept our van for 5days, fined us for not having Lagos state driver’s licence, got my driver to obtain the license and paid tax and got me to go through almost a whole day of mental torture in order to prove that I had paid my tax up to date, lost all the business opportunities the van and the two drivers would have done in 5 days and then be asked to pay for parking a van which was actually seized. At that point I considered calling my attorney, but a still small voice asked me to pay and go that any such move could complicate matters. If the lawyer arrived the yard, he might not be allowed to leave without showing his 2016 tax receipt! We paid and collected the gate pass.
Now where is the key of the van? We were referred from one officer to another. Then the guy who had the key at the gate gave a funny salute and reminded us that it was Friday and that the boys needed something for the weekend. I snapped at him. Weekend ko, weekend ni!
He handed us the key and I went home to put my experience in print so that others can read and go and do all that they must do to avoid getting into this Lagos internal revenue generation net.
What a week! What a desperation for internally generated revenue! What an ambush and abuse? This Lagos, na wao!
Mazi Sam Ohuabunwa