Of late, Enugu State has witnessed a surge in the number of uniformed and non–uniformed revenue officials criss-crossing the state in a bid to bolster its Internally Generated Revenue (IGR) profile in line with Governor Peter Mbah’s promise to grow the state into a $30bn economy and repositioning it as the premier destination for business, investment, tourism and living.

This quest for improved revenue has seen certain sectors and areas hitherto neglected by previous administrations become potential revenue sources, and many residents and businesses are recounting sour experiences.

Across the state, it is now common to see bills and notices of sanctions posted on public and private buildings, where the government is demanding one form of settlement or the other from residents and business owners.

Aside from these warning signs, red tapes and padlocks are increasingly slammed on business premises to prevent the owners from carrying out further activities until required levies are paid to the government.

These bills and notices are placed by the State Internal Revenue Board officials, the Enugu Geographical Information System (ENGIS) officials, the Enugu Capital Territory Development Authority, and the Housing Development Authority.

There are also demand notices from the state Waste Management Authority (ESWAMA), the Ministry of Health officials, as well as fees demanded by local council revenue officials.

On the streets are traffic officials from the Ministry of Transport (MOT). They lay in ambush inside tricycles at street junctions with traffic lights, waiting for motorists, who would either break traffic laws or park inappropriately. There are also Vehicle Inspection Officers (VIOs), who barricade major roads and demand vehicle particulars from motorists. Offenders are summarily tried by mobile revenue courts.

It is also becoming very difficult to renovate or repair any property in the state without parting with a reasonable portion of the project cost to both certified and unverified officials, who harass and frustrate every step of the project.

Investigations by The Guardian further revealed that the cost of services offered by the government has also been increased several-fold, all in a bid to meet the new revenue target.

For instance, transporters, including motorcyclists, tri-cyclists, minibuses, tankers and trucks pay through a daily ticketing system. They must make the payments at the latest by noon of each day or face a penalty. This was not the case previously, as they were made to pay through their unions at will.

Street shop vendors operating outside structured markets are not left out as they now pay an annual levy of N30,000, away from the sanitation levy, which is handled separately by the state ESWAMA, while market traders pay N36,000 annual levy, which covers other relevant charges, including those of ESWAMA and the signage and advertisement agency. The money must be paid between January and March every year, or a penalty will be imposed.

Residents of urban centres in the state are besieged by officials of the ESWAMA, who move around accompanied by AK-47-wielding policemen, who arrest and prosecute sanitation levy defaulters within a stipulated time frame.

Other charges, which enforcement in the state has been scaled in vigorously, include income tax, purchase tax, land use tax, tax on rental income, business premises, director’s tax, and environmental tax, among others.

While the purchase tax is paid on goods purchased from shops in the state, the land use tax is calculated annually based on the location and size of the property.

For a while, Enugu State’s economy tanked at about $4.4 billion, but with his emergence on May 29, 2023, Governor Peter Mbah promised to move the economy to $30 billion using the Internally Generated Revenue (IGR) before he leaves office.

Two years down the line, the state government appears to be recording serious breakthroughs with improved revenues. For instance, when he presented the state’s 2025 budget last year, Mbah announced that the state’s IGR grew from N37.4billion in 2023 to over N200 billion in 2024, stressing that his government was targeting about N500 billion this year in IGR.

He attributed the feat to the expansion of the tax net and the opening of multiple outlets in which government revenues could be paid, among others. He further stated that the state government has tightened the loose ends with digitalized tax systems, institutional reforms across over 100 ministries, departments and parastatals (MDAs), as well as increased staffing in tax administration, and collaboration with technical consultants.

Conversely, while the state government is on the road to achieving its heart’s desires, the drive to improve the state’s IGR has placed enormous pressure on businesses in the state, with many small and medium-scale enterprises devising means of survival, including opening their businesses late in the evenings or during weekends when government officials are off work.

Only recently, a report by the National Bureau of Statistics (NBS) listed Enugu State as one of the “costliest” states in the country to live in, just as residents have continued to query the rationale for the high taxation to improve IGR when many residents go to bed with empty stomachs.

They further argued that over-taxing the people to improve revenue targets and infrastructure without a direct impact on the well-being of the people would not augur well for the state, especially given the fact that fixed incomes are not improving, but taxes and investment drives are on the upswing.

According to Chidera Nwangwu, a hotelier, the pressure to meet government levies and taxes was not only impacting negatively on improved staff welfare, but also limiting expansion.

“I can’t think of improving my workers’ salaries at the moment because of the pressures here and there. Aside from an increase in operational costs, you need to meet all these demands from the government. Parts of these demands are in taxes, which are collected by different bodies. It is structured in a way that, without payment, you would be sanctioned. The truth is that businesses in the state are facing serious economic challenges, and it takes courage to continue to invest here,” he declared.

Nwangwu’s position was reechoed by an educationist, Jerry Ugwuoke, who runs a lesson centre at Achara Layout. He stated that the rate of taxes imposed on every resident and business in the state was putting pressure on them.

“You can see how house rents are increasing almost every month, and the landlords are attributing it to charges placed on them by the government. Where I live on Agbani Road, the landlord increased his rent twice last year. He increased it from N350,000 to N600,000 for the three-bedroom flat that I occupy. It is like that everywhere in the state. If you escape the house rent, there is a sanitation levy waiting for you, which they charge for two years at a stretch. Those in the shops are running helter-skelter because some of them cannot raise the amount that they are levied from their sales. It is not a funny situation, and we think that the government should take another look at taxes being charged in the state to allow businesses to thrive,” he said

A public affairs analyst, Doris Chigbu, who attributed the rising rate of tax collection in the state to the numerous projects embarked upon by the government, stressed that the overall implication is that it would have “unpleasant consequences on the people around. She, however, deplored the method of collection of these taxes, alleging that it “is putting many on their toes all the time, making them very inconvenient.”

When he spoke to The Guardian recently, a development economist, Prof. Chinwuike Uba, cautioned against an arbitrary increase in taxes, levies and fees in a bid to achieve improved revenue, stressing that it was vital to assess their potential impact on the ease of doing business in the state.

“Such an increase in costs may inadvertently create challenges for entrepreneurs and businesses, ultimately hindering economic growth and exacerbating the existing poverty situation in Enugu State, where about 61.3% of the population already struggles with multidimensional poverty,” he stated

He had observed that the state was at the bottom of the ease of doing business rankings, placed 36th out of the 36 states, indicating a blatant disregard for fostering a business-friendly environment.

Uba added that “while the improvement of the state’s internally generated revenue is undoubtedly crucial, the greater urgency lies in devising astute and collaborative initiatives that incentivise existing businesses and entice new enterprises to grace the state’s doorstep.”

While he acknowledged the social obligation of citizens in tax payment, he called for caution to “avoid the perilous path of stifling the very entities responsible for generating the golden eggs.”

However, to guard against this, Gov. Mbah recently inaugurated a 25-man Council of Enugu’s Ease of Doing Business, saying it was in tandem with his electoral promise to grow the state into a $30bn economy from $4.4bn by repositioning it as the premier destination for business, investment, tourism and living.

Mbah, who is the chairman of the Council, had promised that the council would work hard “to ensure that we come close as a state to becoming a frontier of the Ease of Doing Business”.

But responding to claims of residents and businesses being over-taxed by the state, the Chairman of the Enugu State Internal Revenue Service (ESIRS), Emmanuel Nnamani, stated that all taxes collected were legitimate and within the confines of the law. He also added that the state was rated the “most expensive city” because of a temporary demand–driven inflation caused by project development, and blamed the high rents on the developer’s style of family housing in place of mass housing and not taxes paid in the state.

Nnamani further said that the entire revenue collected was used for infrastructure development and social services, stressing that evidence of their application could be seen in investments in education, healthcare, road upgrades, and infrastructure such as the International Conference Centre, the Presidential Hotel, NigerGas Company, among several others.

“Taxes and revenues in Enugu State remain within the limits of the law. We do not impose any levies outside what the law permits. A key challenge has been bringing the informal sector, especially market traders and transport operators, into the formal tax net,” he stated.

Nnamani added that what was charged in Enugu as tax was not different from what obtains in other states, explaining that the state government had maintained a friendly disposition in her quest to improve Enugu’s economy, and was sure that interventions so far were encouraging to continue to attract investments in the state. (The Guardian)