With his arms folded across his chest, God First stood afar and watched helplessly as officials of the Kwara State Inland Revenue Service ( KWIRS), forcefully locked up his boutique in the Taiwo Isale area of Ilorin, the state capital. He looked pale and unwell, with his eyes bearing an unexplainable brunt.
It was only 11.00 am on July 2024, and God First had hoped for a productive day. However, the arrival of about six KWIRS officials alongside two police officers, shattered his expectations as they stormed his boutique, chased out his staff, and roughly dragged all the mannequins holding onto menswear back into the shop.
“They are forcefully closing my shop. Do they even have such rights? What did I do to them? Without any warning, they just said I owed some tax arrears and locked up my shop,” he laments.
Apparently feeling the weight of the situation, he said that he had been paying his taxes promptly through his union and owed the state no money but recently they brought him a letter to pay N20,000 for 2022.
“They first brought N20,000 for the previous year in May and came this morning with another letter stating that I will pay arrears of N188,000,” he says, noting that he had paid N12,000 for 2022 through his union with receipt of payment issued to him.
“So when they brought that N20,000, I already paid through my association, I tried to explain to them, but they shut me down. This morning again, they used their hands to pack my market and lock my shops.”
Like other states, Kwara has different tax obligations that individuals and corporate entities are expected to meet. This includes the personal income tax, which falls under pay as you earn (PAYE), and can be done through direct/self-assessment.
This personal income tax is mostly levied on traders, who fall under the non-corporates, based on either the profit or gains they make in a year, according to the law stipulated by the FIRS. The law allows for 11 percent to be deducted on the first N300,000 chargeable income, 15 per cent from the second N300,000 and 19 per cent in N500,000 chargeable income.
This can be determined after the trader either files their annual return or the state revenue office conducts a direct assessment and levies an amount based on their on-field assessment.
Appparently, the KWIRS officials came to enforce a court order based on a motion filed under Section 38 (1) of the Kwara State Revenue Administration Law (2005) (as amended). The motion, dated February 6, 2024, and filed on February 8, 2024, sought for the right to shut down shops belonging to tax offenders.
Although God First was not aware of any court hearing and was not invited over the allegations brought against him, the court ordered that the “applicant’s chairman or any other authorised officer assigned to distrain the respondents’ goods and premises bonds to enforce the liability for personal income tax rate for the period covering the year 2014 to 2023” in the sum of N188,140.00.
God First’s business was shut down even though he claims to have paid all the fees required from him as taxes from 2018 to 2023.
His taxes amounted to about N84,000 after an arrangement between the association and the government, which occurred in 2015 and was subsequently renewed in 2018.
It was gathered that the Kwara State Association of Igbo Traders (KWAITA) had first rejected the offer by the state to collect taxes in groups, but the government continued to appeal until the agency conceded.
“They appealed to us to help them collect tax from our people knowing very well that we know our people more than they do, that they can’t be able to access up to 15 per cent of our traders,” Aloysius Nwora, the coordinating chairman of KWAITA on tax matter, said.
Nwora added that the state revenue service offered a 10 per cent bonus for any amount the union collected, starting with N3,000, N4,500, N6,000, and N9,000 in 2015. Meanwhile, these amounts keep increasing over the years, with both the association and the state renewing their agreement over time.
In 2023, the KWIRS decided to change this arrangement, opting to engage with individual traders directly without involving the association. Although there was a rejection by KWAITA, it was gathered that it later gave in to this change. Yet, the situation took a drastic turn when KWIRS began issuing new tax assessments, claiming that the traders owed arrears dating back to 2015.
The matters escalated on March 1, 2024, when KWIRS conducted trials.