Abia Tax Reforms Not Tax Increase, Says Govt

By Ezechukwu Adimoha

The Abia State Government says its ongoing reforms in tax administration are aimed at making revenue collection more transparent, traceable, auditable and taxpayer-friendly, stressing that the reforms do not amount to an increase in taxes paid by residents and businesses.

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

Prince Kanu said the tax reforms were part of the broader transformation of government institutions and processes under the Otti administration.

He noted that tax administration in the state had improved significantly from the past, when independently operated processes often resulted in manual interventions, middlemen handling cash, arbitrary practices and poor accountability.

“Tax administration at present is better than the past when processes were independently operated, leading to manual intervention, middleman cash handling, arbitrary practices of sorts, and poor accountability.

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

He explained that the automation and integration of revenue processes would enable taxpayers to know what they were assessed to pay, why they were 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 increment. 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 remained committed to strengthening the state’s tax administration system.

Prince Kanu said the 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.

He explained that the Board’s current reforms were primarily aimed 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,” Elekwachi stated.

On the controversy surrounding Tax Clearance Certificates (TCC), the BIR Chairman 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 lawful mechanisms, including income verification and bank statements, could be used to establish the appropriate level of taxable income, stressing that not every inflow into a taxpayer’s account would automatically be treated as taxable income.

Elekwachi 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 said the government had introduced a harmonised demand notice that consolidates ASEPA, Business Premises, Signage and Stallage Fees into a single payment per shop.

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 Special Adviser to the Governor on Internally Generated Revenue, Dr Emmanuel Okpechi, said the reforms were aimed at ensuring transparency on the part of both government and taxpayers.

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.

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