A report by ESIRS indicates that a vast majority, approximately 99%, of the informal sector in Enugu avoids paying taxes, justifying the validity of state-imposed levies.
In Enugu State, the Internal Revenue Service (ESIRS) is actively working to increase tax revenue by bringing the informal sector into the formal tax net.
Led by Chairman Emmanuel Nnamani, the ESIRS collects personal income tax through two principal means: Pay-As-You-Earn (PAYE) for individuals in formal employment, and Direct Assessment for those outside the formal sector. Compliance is generally seamless among those in formal employment.
However, one of the most critical challenges is transitioning the informal sector, particularly market traders and transport operators, into the formal tax net. Nnamani stated that 99% of the informal sector in Enugu State does not remit taxes to government coffers.
To address this issue, the state has introduced a consolidated N36,000 annual levy for market traders, which covers various charges including environmental sanitation, signage fee, local government tollage, and business premises levies. Street-based vendors are expected to pay N30,000 annually, with ESWAMA charges handled separately.
Transport operators in Enugu State, including Okada riders, Keke drivers, minibuses, tankers, and trucks, operate under a daily ticketing system. The National Association of Small Scale Industrialists (NASSI) in Enugu has organized to register informal sector workers and obligate them to file taxes with the federal government.
Nnamani emphasized that their duty is to apply the law fairly and ensure that the people of Enugu State prosper. He denied allegations of imposition of arbitrary levies, stating that taxes and revenues in Enugu State remain within the limits of the law.
Enforcement mechanisms, including legal action, are sometimes necessary to ensure compliance from those outside the formal sector. Defaulters after March 31st are subject to enforcement action, according to Nnamani.
The ESIRS tax administration in the state is guided primarily by the Personal Income Tax Act (as amended). The state's tax regime is consistent with federal laws implemented across all states.
Recently, President Bola Tinubu signed into law the Nigeria Tax Bill (Ease of Doing Business), aiming to consolidate Nigeria's fragmented tax laws into a harmonized statute. The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) Chairman, Dr. M.B. Shehu, called for the integration of Nigeria's informal sector to broaden the nation's tax base.
Circulating reports on social media regarding the state's tax regime have been described as 'false and misleading' by Nnamani. He encourages all taxpayers to comply with their tax obligations and contribute to the development of Enugu State.
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