Nigeria’s so-called tax collectors: menacing and mafia-like

Captain Nwokuha

Captain Nwokuha insists he plays a positive role as a traffic cop and is not just a ‘tax’ collector

Hired as a so-called tax collector by several influential families, Captain Nwokuha has a chilling look as he walks around with a piece of wood to enforce his authority at a busy and chaotic road junction in the city of Port Harcourt, in southern Nigeria.

The 34-year-old’s job is to collect “taxes” for what he calls the “community” from the taxis and 18-seater buses that operate in this part of town.

Mr. Nwokuha’s work has its roots in an old tradition, when companies paid a one-time fee or offered a drink as a tribute to their hosts for good news.

But now it has turned into what critics say is an extortion racket.

Some families, claiming to act on behalf of local communities, demand fees from businesses, whether taxi drivers or market traders, operating in what they consider their domain.

Mr Nwokuha says he receives 5-7,000 naira (£5-7; $6.50-9) a day – a reasonable amount in Nigeria.

Married with two children, he keeps some of the money while the rest is given to five powerful families in the community – where it gets lost in a trail of private pockets.

So-called tax collectors or third party agents are also used by states and local governments in Nigeria to collect certain taxes.

“These agents use private accounts and make deductions before handing them over to the government,” says Michael Ango, a former government tax official who now works for the private company Andersen Tax.

“[Their methods] give the impression that the state uses force and muscle rather than legitimacy.”

Led by new President Bola Tinubu, the Nigerian federal government has pledged to crack down on what it calls “self-imposed touts, disbelievers and tax collectors”.

As for Mr. Nwokuha, he thinks he plays a positive role, as a traffic policeman who resolves disputes in the ruthless taxi business.

“If there’s a fight between the drivers, I’ll sort it out,” says Mr Nwokuha, who patrols Port Harcourt’s lucrative Rumuola Interchange on weekdays from dawn to dusk in his fluorescent vest.

Before a driver leaves, the man with “task force” written on his vest receives 20% of the passenger fares.

“Taxis are not allowed to drive here,” said Mr Nwokuha, pointing to a “no parking” sign painted in police colors.

“But if they choose to do that, they have to pay the community,” he told the BBC.

In the rare case that a driver refuses to pay, they may have their rear-view mirror or taillight smashed – or their license plate taken away.

If they dare to fight back, they might feel Mr. Nwokuha’s wooden staff smash their skulls.

A man in an orange shirt removes the license plate from a vehicle

A so-called taxman removes the number plate from a vehicle in the capital, Abuja, to prevent the motorist from escaping

Mr. Nwokuha is doing what should be the job of local council workers. Nigeria has 780 local councils, but most of them are barely functional.

The void is filled by men like Mr. Nwokuha – or just about anyone who can put up a roadblock and enforce his authority.

These usually consist of a wooden bar between two rusty barrels and homemade spikes for drivers who want to be smart trying to avoid them.

They are more common in the more affluent parts of southern Nigeria, including the highways where tax collection is done on behalf of certain state governments.

A lorry driver told the BBC he was paying up to 80,000 naira (£80; $100) as he drove through dozens of roadblocks on his way from Nigeria’s biggest city, Lagos, to Imo to the east: a distance of 540 km (335 miles).

“Between Edo and Port Harcourt [alone] there are 15 such roadblocks,” he adds.

Expressing a similar view, a cold chain logistics operator said: “There are many transport taxes, there is one called revenue, there is a radio tax, there is a charge for loading, another for parking, one for unloading.

And that’s not including the bribes he often has to pay police officers as he drives across the country.

Clement Akanibo of Nigeria’s Chartered Institute of Taxation describes it as “akin to collecting taxes at gunpoint”.

“It complicates doing business and increases the final cost by up to 15%,” he says.

Men packing tomatoes in baskets

President Tinubu’s government wants market traders to pay their taxes digitally

It’s unclear how Mr Tinubu plans to end it, but he will need the support of state and local governments because these taxes fall under their jurisdiction – not the federal government’s.

At its heart is a powerful system of patronage that sees some of the money going into the pockets of politicians, powerful families and the army of unemployed workers like Mr Nwokuha.

Mr Tinubu’s government has said it wants to overhaul the entire tax system to boost its revenue so that it can increase the amount it spends on services such as health and education, as well as on repay its burgeoning debts.

It has set itself the objective of increasing the tax/GDP ratio to 18% within three years.

Official Nigerian data shows the ratio was around 11% in 2021, lower than what the World Bank reported for Kenya (13%) and South Africa (26%).

For now, Mr Tinubu’s government is focusing on the taxes it is responsible for – including value added tax (VAT).

The federal government does not use so-called tax collectors, expecting companies to make direct payments.

In what appears to be an attempt to end tax evasion, he wants to digitize VAT payments, starting with the association of 40 million market traders.

It won’t be easy as most of them don’t keep financial records and have never paid VAT, so they might resist the decision amid the current economic difficulties.

But if the plan works, Mr Tinubu’s government could then hope to persuade state and local governments to abandon their archaic system – which many Nigerians would welcome as it would free them from the clutches of menacing tax collectors like Mr .Nwokuha.

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