Automation is not tax hike, Abia govt defends reforms

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The Abia State Government has said its ongoing tax administration reforms are not aimed at increasing the taxes payable by residents, but at improving transparency, accountability and ease of doing business.

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The state Commissioner for Information, Okey Kanu, stated this on Monday while briefing journalists at the Government House, Umuahia, on the outcome of the State Executive Council meeting presided over by Governor Alex Otti.

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Kanu said the reforms were designed to make tax administration “more transparent, traceable, auditable, automated and taxpayer-friendly,” while eliminating revenue leakages, multiple collections and arbitrary practices.

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He said, “Automation is not a tax increase. Transparency is not a tax increase. Closing revenue leakages is not a tax increase.”

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The commissioner explained that the integration of revenue collection systems, particularly at vehicle licensing offices, was introduced to eliminate cash handling and ensure that payments made by taxpayers were properly accounted for and remitted to the government.

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He also said there had been no increase in Pay-As-You-Earn, land or vehicle taxes, stressing that the Abia State Board of Internal Revenue lacked the power to unilaterally alter tax rates.

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On the Tax Clearance Certificate, Kanu said the process was being implemented in line with existing tax laws and the new national tax framework, which require proper assessment of taxpayers’ income rather than the previous practice of paying a flat amount without adequate assessment.

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He said the government would not arbitrarily classify funds or payments into taxpayers’ bank accounts as taxable income, but would establish through lawful assessment and verification which transactions constituted taxable income.

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Also speaking, the Special Adviser to the Governor on Internally Generated Revenue, Dr Emmanuel Okpechi, said the reforms were intended to promote transparency on both sides of the tax administration process.

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Okpechi said taxpayers were expected to declare their income honestly, while the government would ensure that no citizen was taxed beyond what the law prescribed.

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On the consolidated demand notice for businesses, he explained that the initiative was introduced to harmonise various charges and eliminate multiple collections by government agencies.

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“Instead of multiple people coming to harass you, you pay at one point and you are cleared,” he said.

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Okpechi added, “What we are doing is strengthening the system, making transparency work, both for the government and for the taxpayer. Nobody will be taxed a kobo beyond what is lawful.”

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The Executive Chairman of the Abia State Board of Internal Revenue, Uche Elekwachi, also said the board had not increased taxes, but was enforcing existing tax laws and introducing systems to improve compliance and block revenue leakages.

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“There is no increment whatsoever. No increment on PAYE, no increment on lands, no increment on vehicle licences or for the issuance of Tax Clearance Certificates, TCC,” Elekwachi said.

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He explained that the government had consolidated the various payments so that taxpayers would not receive multiple demand notices after making the required payment.

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“What the government has done is to consolidate these payments so that once you pay, nobody comes to you with any other demand notice. What we did was mere integration into the government system,” he said.

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Elekwachi further clarified that the board would not automatically treat every inflow into a taxpayer’s bank account as taxable income, adding that taxpayers seeking Tax Clearance Certificates would have the opportunity to explain and substantiate the nature of their transactions during the assessment process.

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The Chief Press Secretary to the governor, Ukoha Njoku Ukoha, said the clarification became necessary following claims by some opposition figures concerning the state’s tax reforms.

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He said the new tax system had harmonised various payments, including stallage and ASEPA fees.

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“Whether it is stallage, ASEPA fee or any other, what the government did was to consolidate it, so that once one pays, he has paid everything,” Ukoha said.

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