By Okafor Joseph
August 26, 2024

In the bustling markets of Kano, traders are increasingly frustrated as they grapple with multiple layers of taxation, despite the state’s efforts to streamline tax collection through the Consolidation Law. This law, which was introduced to simplify tax payments and reduce the burden on businesses, appears to have done little to alleviate the plight of local traders.

Salisu, a trader in the Kwari market, shared his experience, highlighting the complexities and financial strain brought on by the overlapping taxes. “First, the state government gives you a notice period of one to two months, depending on the circumstances. When it’s time to pay, you have two options: pay as a group or as an individual. In either case, you’ll get a receipt,” Salisu explained. According to him, negotiations with revenue collectors typically result in payments ranging from N20,000 to N50,000 or more annually.

However, the state government isn’t the only entity levying taxes. “Secondly, the local government follows the same notice and payment strategy as the state government, with prices varying. The tax paid to the local government is referred to as sanitation and shop rate, summing up to N50,000 annually,” Salisu continued.

Beyond these, traders must contend with the market union, which also imposes its own set of levies. Salisu recounted instances where unknown individuals approached his shop, claiming to be tax collectors from the market union. “They say their office is different from that of the managing director and they present you with another levy to pay,” he said.

To make matters worse, another group of tax collectors claiming to be from the office of the managing director of Kwari market also arrives, demanding additional taxes under the guise of security and sanitation fees. “Apart from these, there is a shop ownership fee, and if the owner doesn’t pay, they lock up the shop, despite all the taxes we are paying. If we complain, they tell us to find the shop owner,” Salisu lamented.

The overlap in tax demands is not just confusing but also financially draining. Salisu noted that the same security and sanitation fees often appear in local government and market union taxes, sometimes without any receipts being issued from the MD’s office. This lack of transparency often leads to conflicts when another batch of tax collectors arrives, making the situation even more chaotic.

Between Tax and Multiple Taxation

The National Tax Policy defines tax as a monetary charge imposed by the government on persons, entities, transactions, or properties to yield revenue for the government to run its operations. However, what is happening in Kano’s markets is far from straightforward taxation.

Multiple taxation occurs when taxes, fees, and rates are levied on the same person for the same liability by more than one tax authority – be it state, local council, union, or other entities. This issue is exacerbated by unlawful compulsory payments collected by local and state governments without appropriate legal backing, often enforced through intimidation and harassment.

These practices are usually characterized by the use of stickers, the mounting of roadblocks, and the involvement of revenue agents or consultants, including motor park touts. In essence, traders find themselves facing demands from multiple levels of government for the same or similar taxes, a situation that the Consolidation Law was supposed to address.

For traders like Salisu, the promise of a simplified tax system remains unfulfilled as they continue to bear the brunt of multiple taxation, struggling to keep their businesses afloat in an environment where tax burdens are anything but consolidated.