Captain Nwokuha

Captain Nwokuha said he is playing a positive role as a traffic officer, and not just a “tax collector”.

Captain Nwokuha, hired as a tax collector by several influential families, looks menacing as he walks around with a stick to enforce his authority on a busy and chaotic road junction in the southern Nigerian city of Port Harcourt.

The 34-year-old’s job is to collect “taxes” for what he calls “the community” from taxis and 18-seater buses operating in the city.

Mr. Nwokuha’s work is rooted in businesses thanking their hosts for good news when paying a one-time payment or offering a drink.

But now it has turned into what critics say is extortion.

Some families, claiming to act on behalf of local communities, ask businesses, taxi drivers or market traders, to work on what they see as their territory.

Mr Nwokuha says he collects 5-7,000 naira (£5-7; $6.50-9) a day – a reasonable amount in Nigeria.

Married with two children, he keeps some of the money, while the rest goes to the five most powerful families in the community – disappearing into private pockets.

Tax collectors or third party agents are used by Nigerian states and local governments to collect some taxes.

“These agents use personal accounts and make deductions before submitting to the government,” says Michael Ango, a former government tax official who is now at the private firm Anderson Tax.

“(Their tactics) give the impression that the state is using force and muscle rather than legitimacy.”

Nigeria’s federal government, led by new President Bola Tinuyi, has vowed to crack down on what it calls “abusers, crooks and self-imposed tax collectors”.

As for Mr Nwokuha, he believes he is playing a positive role by doubling up as a traffic officer to resolve disputes in the cut-throat taxi trade.

“If there is a conflict between drivers, I will resolve it,” says Mr Nwokuha, a Port Harcourt profiteer who wears a fluorescent shirt and oversees the shifts from morning to night on weekdays.

Before the driver takes off, the person with “Task Force” written on his shirt receives 20 percent of the passenger fare.

“The taxis are not allowed to operate here,” says Mr Nwokuha, pointing to a “No Parking” sign painted by the police.

“But if they choose, they have to pay for society,” he told the BBC.

When a driver refuses to pay, a side mirror or taillight may be smashed – or their license plates lifted.

If they dared to fight, they could feel Mr. Nwokuha’s wooden stick cracking their skulls.

A man in an orange shirt pulls out a vehicle's number plate.

The so-called tax collector removed the license plate of the vehicle in the capital Abuja to prevent the driver from escaping.

Mr. Nwokuha is doing what should be the job of local council staff. Nigeria has 780 local councils but most of them are not functional.

The gap is filled by people like Mr. Nwokuha – or anyone who can block the road and assert their authority.

These tend to consist of a wooden bar between two rusty barrels, and home-made pegs for drivers who want to be smart in trying to remove them.

They are more common in the prosperous southern parts of Nigeria, including highways where taxes are collected on behalf of some state governments.

One lorry driver told the BBC that he would pay up to 80,000 naira (£80; $100) to travel east of Nigeria’s largest city, Lagos, to Imo. .

He added: “There are 15 such roads between Edo and Port Harcourt (alone).

A cold logistics operator expressed a similar opinion: “There is a lot of shipping tax, there is a so-called revenue, there is a radio tax, there is a loading tax, another for parking, one for unloading.”

And this does not include the bribes he pays to police officers as he travels around the country.

Clement Akanibo of the Chartered Institute of Taxation of Nigeria described it as “similar to collecting taxes at gunpoint”.

“It makes it difficult to do business and increases the final cost by 15%,” he says.

Men packing tomatoes into baskets

President Ninobu government wants market traders to pay taxes digitally

It is not clear how Mr. Tinius plans to accomplish this, but since these taxes fall under his jurisdiction, not the federal government, he will need the support of state and local governments.

At its heart is a powerful management system that sees a portion of the money end up in the pockets of politicians, powerful families and unemployed people like Mr Nwokuha.

The government of Ninifou said it wants to reform the entire tax system to increase revenue, increase spending on health and education, and pay off its ballooning debt.

It has set itself a target of increasing the tax-to-GDP ratio to 18 percent in the next three years.

According to official Nigerian data, the ratio was It was around 11% in 2021, which is lower than the World Bank reports for Kenya (13%) and South Africa (26%).

For now, Mr. Tinubu’s government is focusing on the taxes it is responsible for – including Value Added Tax (VAT).

The federal government does not use tax collectors, it expects businesses to pay directly.

In what appears to be an attempt to curb tax evasion, the 40-million-strong market traders association wants to digitize VAT payments.

This will not be easy as most of them do not keep financial records and have never paid VAT, which may be against the move in the current economic crisis.

But if the plan works, Mr. Tinubu’s government may hope to persuade state and local governments to ditch their archaic system – which many Nigerians will welcome because it will free them from the threat of tax collectors like Mr. Nwokuha.

More BBC stories about Nigeria:

By W_Manga

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