No New Taxes in Abia, Govt Insists

…Says Tax Reforms Target Revenue Leakages Not Increased Tax Burden

Abia State Government has said its ongoing reforms in tax administration are designed to make revenue collection more transparent, traceable, auditable and taxpayer-friendly, and not in the increase of tax burden on residents and businesses.

The Commissioner for Information, Prince Okey Kanu, stated this on Monday while briefing journalists on the outcome of this week’s Executive Council Meeting presided over by Governor Alex Otti.

Prince Kanu stressed that the tax reforms were part of the transformation of government institutions and processes under the Governor Otti led administration.

The commissioner noted that the state government has focused on changing and improving the system of tax collection since assuming office, rather than increasing tax rates.

“Since inception of this government, the focus has been to make tax administration in our state more transparent, traceable, auditable, automated, and taxpayer-friendly,” he said.

According to him, the previous system allowed room for manual intervention, middlemen, cash handling, arbitrary practices and poor accountability, which the new system was designed to eliminate.

He said the automation and integration of revenue processes would enable taxpayers to know what they were being assessed to pay, why they were being assessed and the approved channels through which payments should be made.

“The new system under operation seeks to close this gap. 

“Under the new system, the State Board of Internal Revenue is automating and integrating the processes so that taxpayers will know exactly what they are being assessed to pay, why they are being assessed, and how much they are required to pay through government-approved channels.

“Automation, therefore, is not a tax increments. Transparency is not a tax increase. Closing revenue leakages is not a tax increase”.

The commissioner acknowledged that the reforms had attracted resistance from some quarters, but said the government would remain committed to strengthening the state’s tax administration system.

“People resist change. Bad and dubious people resist change the more. Therefore, there is bound to be pushbacks from certain sections of the society,” he said.

Prince Kanu said the state government would continue to administer “taxes that reflect the massive transformation and improvement in virtually every aspect of governance in the state”, in line with Governor Otti’s description of taxation as government’s share of the prosperity it creates for citizens.

Contributing, the Chairman of the Abia State Board of Internal Revenue Service (ABIRS), Mr Uche Elekwachi, said there were no new taxes or increases in existing tax rates.

Mr Elekwachi explained that the Board’s current reforms were primarily targeted at integrating revenue collection systems, particularly in areas where cash payments had previously created opportunities for leakages and poor accountability.

“One thing that we need to be clear about is that the BIR does not have power to increase or reduce taxes.

“There are no new taxes. Cash collection by revenue officials is prohibited under state law”, the BIR Chairman stated. 

On the controversy surrounding Tax Clearance Certificates (TCC), Mr Elekwachi said the Board had not increased the applicable tax rates but was insisting that taxpayers seeking certificates should undergo proper assessment in accordance with existing tax laws.

He said the authorities could use lawful mechanisms, including income verification and bank statements, to establish the appropriate level of taxable income, while stressing that not every inflow into a taxpayer’s account would automatically be treated as taxable income.

The BIR Chairman also explained that the consolidated demand notice for traders was not a new charge, but a harmonised payment structure intended to reduce multiple collections and make compliance easier.

He urged taxpayers to use approved payment channels and report any official demanding cash payments, stressing that the government would not tolerate illegal collections.

Also speaking, the Senior Special Assistant to the Governor on Internally Generated Revenue, Dr Emmanuel Okpechi, said the reforms were aimed at ensuring transparency from both government and taxpayers.

“The Honorable Commissioner mentioned that one of the outcomes of the reforms we have seen in our IGR ecosystem is transparency. That transparency applies both ways, for government and for the taxpayer”, Okpechi said.

He urged residents to declare all sources of income, noting that taxable income could extend beyond salaries and wages to areas such as rent, interest and dividends, depending on the applicable provisions of the law.

Okpechi stressed that a taxpayer paying more following proper assessment should not automatically conclude that tax rates had been increased.

“So when people are properly taxed according to law, sometimes they have to pay more, but it does not mean that rate has increased”, the governor’s aide said.

He added that the revenue generated by government was essential to funding infrastructure and other public services.

“His Excellency does not print money. And it is the collective, I mean it is the revenue that is in our system that he has the responsibility to harness and use, convert it to good road, convert it to school, convert it to hospital”. Okpechi said.

Related