Awka
The new tax drive by the Anambra State Government aimed at getting people in the informal sector into the state tax net should be implemented gradually with consultation with critical stakeholders so as to get the buy-in of the people.
Statistics reveals that the informal sector represents over 85 percent of the taxable population in the state and further analysis showed that less than five percent of their population pay tax in the state.
This is worsened by the fact that even those who are in the tax net, do not pay what they should to the government.
The Chukwuma Soludo administration had earlier this year introduced a new tax regime for people in the informal sector including traders, transporters, artisans among others.
However, the body language of the people has shown total rejection of the plan.
But in a chat with TNC correspondent in Awka, the Deputy Director, UNIZIK Business School, Dr Chinedu Onyeizugbe believes that the state government’s tax drive is in order as that is only when it can provide amenities for the people.
He however suggested that the process be taken gradually.
“The informal sector plays a key role in the growth of any economy and the Anambra economy cannot be an exception.
“If the people in the informal sector are able to pay their taxes, there is no doubt that government will have the required resources to undertake developmental activities.
“There is no way government can do anything without the taxes from the informal sector and I must commend the state government for looking in the direction of the people in the sector.
“But because the people have not been paying these taxes over the years, it will be an uphill task to start collecting them now and that is why it is important that government takes the implementation gradually,” he said.
Onyeizugbe further advised that the process should start with comprehensive enumeration of people in the sector and consultation with critical stakeholders.
“First, there should be comprehensive enumeration of all traders in the state, so that we know the number of people we are dealing with. This figure will help the government know who is doing what. This was a suggestion I made when I worked in the Transition committee set up by the governor.
“I remember one of such enumeration that we did at Onitsha Main market on the Apprenticeship system and how the figures we realized helped us a lot.
“After the enumeration, government should engage critical stakeholders to enlighten the people on the need to pay taxes and the demerits of not paying taxes. These stakeholders will take up the sensitization initiative down to the markets to make the people understand what is required of them.
“Government also needs to engage the services of taxation experts such as the Chambers of Commerce and the UNIZIK Business School, to do this sensitization,” he said.
Dr Onyeizugbe, who is an associate professor in the Department of Business Administration, Nnamdi Azikiwe University, Awka, however insisted that government should strive to restore confidence in the people by appropriately deploying resources at its disposal for the benefit of the citizenry.
According to him, many people in the informal sector do not pay their taxes because they do not trust the government.
“There is a serious corelation between trust and how the people comply with tax directives.
“There is no way people will be happy paying their taxes with the level of infrastructural decay in the state.
“Take Onitsha for instance, the roads are a nightmare to the residents and those coming into the state to do business and no trader in that circumstance will be comfortable coughing out money to remit to government in form of taxes and levies.
“The government should declare a state of emergency on the roads and follow it up with aggressive construction and reconstruction of the roads.
“When the people see that government is actually interested in providing basic amenities for them, that is when they can comfortably pay their taxes.
“There is also need for accountability and transparency in the way government business is conducted.
“I want to say that the people have confidence in the ability of Mr Governor, to show capacity in funds management and appropriation, considering his background and that we are looking up to, as another motivation for the people to pay their taxes,” Onyeizugbe enthused.
