OLAYINKA OLUKOYA, HAKEEM GBADAMOSI, WALE AKINSELURE, ADEOLU ADEYEMO, and YOMI AYELESO explain how multiple taxes impede the haulage transportation business in the South-West.
One of the key considerations that most haulage transporters have when starting a business is making a profit. Every business relies on making a profit, but haulage transportation goes beyond the limits of capitalism. According to experts, it forms the backbone of every economy, including Nigeria’s.
Evidently, haulage transportation is necessary for the movement of materials and goods across the nation, enabling trade and commerce to run smoothly. This is crucial for companies whose efficient operation depends on the prompt delivery of supplies and goods.
The haulage industry also offers work to drivers, mechanics, dispatchers, and other support staff, and it has significantly boosted the economy of Nigeria by bringing in money for haulage firms as well as the government through taxes and fees.
Additionally, an effective and dependable haulage transportation system is essential for economic growth because it enables companies to run more effectively, lowers transportation costs, and raises the economy’s general level of competitiveness.
However, multiple taxation poses a risk to this important sector. Many of the haulage transporters the Nigerian Tribune spoke with in the states of Ogun, Ondo, Osun, Oyo and Ekiti complained that multiple taxes from government agencies have stymied their operations and are as a result impeding their overall economic contribution.
Samuel Shittu is the Ogun State Chairman of the Truck Owners Association of Nigeria. He said multiple taxes on their businesses come in the form of permits and tickets.
He noted that numerous attempts had been made with a call to the government to harmonize the issue of multiple ticketing and permits, with no success, and explained that stakeholders in the haulage business are uncomfortable with the taxes.
There is an existing edict that prescribes the collection of tolls on the roads, which has not been fully obeyed, he said.
“The issues confronting haulage businesses in Ogun State are many, and these pose a lot of concern to us. We are made to collect too many tickets and permits. We are made to pay in virtually all the local governments we pass through. This is not proper. They engage touts to collect fees from us. They harassed and intimidated our drivers.
“The Ogun State Government is collecting revenue for commerce. The State Internal Revenue is not left out. We also pay to them as well on a daily basis. We pay N500 on a daily basis. We pay to the Ministry of Transportation. The state government also set up another body called the Ogun State Unified Tippers Drivers Association instead of the recognized drivers’ association that is supposed to be running its affairs by itself.
“We have severally requested for harmonisation of all these tickets. We implored them to tell us what we are expected to pay so that we can do that without harassment. There are many illegal tickets all over. This is not too good in any way.”
Efforts to get the reaction of the state government through the Commissioner for Transportation, Gbenga Dairo, yielded no positive result.
In Oyo State, old commercial vehicle operators have to pay a total of N6,000 yearly for various motor stickers/badges while new operators have to pay N12,000, if they pay directly to local government offices.
However, this rate for old operators may go up to N7,500 if purchased from those moving around with the stickers, who claim to have purchased it from the local government offices with the extra N1,500 to cater for transportation and logistics.
In particular, users of designated motor parks tend to make their payment to certain persons at the parks who go to the local government offices to purchase on their behalf at the extra cost.
Those who do not subscribe to motor parks tend to personally sort out how they get the prescribed permits/stickers.
These stickers that the commercial vehicle operators are expected to renew yearly include State hackney permit/identification to emission permit, waste disposal/environmental sanitation clearance.
Meanwhile, the state is yearly faced with the menace of fake hawkers of permits/stickers, who obtain money from unsuspecting commercial vehicle operators never to remit such funds into government’s coffers.
Days into the year, officials from various local government areas tend to look out for commercial vehicle operators who do not have the required stickers and arrest defaulting drivers.
Such arrested drivers are usually fined apart from being compelled to purchase the required stickers, sometimes at higher rates.
However, some drivers observed that the state government has not commenced enforcement and arrest of those without the required 2023 stickers.
The noted that the state government may have soft-pedaled on enforcement due to the present quest for votes from Oyo electorate and is expected to resume enforcement once election is over.
A cross section of drivers in Ibadan to include Mr Olaolu Samuel, Mr Segun Gbadebo, Alhaji Muftau Sekoni described the permit fees in Oyo State as fair, noting that in some other states, drivers have to pay about N17,000 yearly to get various permits, stickers.
Meanwhile, this is apart from the N300 daily payment to park managers.
Haulage fees on manufactured goods in Oyo State range from N1,000 to N1,200 per trip, amounting to between N5,000 and N6,000 per week and statutorily between N200,000 and N300,000 per year.
Buses conveying heavy products are charged N1,200 per trip; light products, N1,100; lighter products, N1,000, while the fine for nonpayment of haulage fee is statutorily an amount not exceeding N50,000.
Across Ibadan, the Oyo State capital, it was observed that both adhoc staff, engaged strictly for haulage fee payment enforcement, and regular uniformed personnel are jointly involved in the stoppage of vehicles, conveying manufactured goods, to ascertain their haulage fee payment.
According to Chief Executive Officer, Chemiroy Nigeria Limited, Mrs Fatima-Roy Lagbaja, who is sub-consultant to the Oyo State government on collection on haulage fees, the state permits that the N1,000 to N1,200 payment is covers whatever number of trips made by the bus on a particular day.
Upon yearly payment of Haulage fees, Lagbaja, while speaking with the Nigerian Tribune, noted that the owner of the buses get sticker to paste on their vehicle, while those who make daily and weekly payment get receipts.
She, however, noted that the agency in collecting Haulage fees by gives room for negotiation with bus owners regarding the amount to be paid and mode of payment, whether daily, monthly or yearly.
Asked why the consultancy firm collects cash, Fatima-Roy responded that it sometimes allows such because of instances where people claim to have made transfers only for the firm not to be able to trace such payments.
She also knocked down claims of outrageous haulage fees, saying that the fee template was a consensus involving the Manufacturing Association of Nigeria (MAN), the Ibadan CICS Ibadan, state Board of Internal Revenue and Ministry of Trade, Investment and Cooperatives.
Prior the present payment, she noted that the gazette of the state actually stipulates about N4,000, whereby the amount hitherto payable on a crate of alcohol is N50 per crate, N20 per crate of soft drink, N50 per carton of manufactured or processed items, N50 per carton of cigarette.
According to Lagbaja, the consultancy applied “human face” in haulage fees charged as well as in enforcement.
Chairman, MAN, Oyo, Osun, Ondo, Ekiti States branch, Mr Lanre Popoola, speaking with Nigerian Tribune, said the association was a signatory to the current template which he described as fair enough.
He said the MAN had not received complaints regarding the current fee template, but said anyone opposed to the current haulage fee template or experienced sharp or scornful practices in enforcement of payment by the consultant hired by the state government should make complaints to the association for relevant action to be taken.
From Ogun State to Ondo State, the story is not any different. A member of the truck drivers’ union in the state, Joseph Akinwumi, said government officials or revenue officers disturbed their journey on a daily basis, especially while on interstate travel.
Akinwumi explained that they are faced with daily extortion by officials in various states they visit while on duty, saying they are faced with extortion by uniformed security personnel who usually mount roadblocks along highways
He said this amounts to double taxation imposed on them by various state governments, noting that they are usually forced to pay for some stickers that do not exist.
He lamented the hostile attitude of the collectors, saying that anybody who was reluctant or refused to pay would have their vehicles and goods seized or destroyed, as the case may be.
According to him, the various taxes imposed by the state governments affect their business, saying “we encounter delays while moving from one state to another. Even if we have paid for interstate travel in our state of residence, we will still have to pay when we visit other states.
“I would like to appeal to all of these state governments to harmonise these payments in order to end multiple taxation and impede the free movement of our vehicles throughout the country.”
An official of the state government who spoke with Nigerian Tribune said those who ply their trade within the state pay N10,000 annually while those on interstates pay N15,000
He listed some of the stickers issued to truck drivers, including the driver /conductor badge, hackney permit, site sticker, operation permit, outdoor mobile permit, road taxes, road users permit, sanitation permit, emblem and proof of vehicles, among other stickers.
He nevertheless excused some taxes that other states impose on truck drivers, claiming that these vary from state to state.
The plight of haulage transporters is fundamentally the same in Osun State as in other states our correspondents have monitored. The transporters say that a number of taxes they are responsible for have an impact on their businesses. The effect, however, has not only been felt by their businesses because they have abruptly increased transportation fees, putting passengers through hardship and placing them in an intolerable predicament.
In an interview, one of the transporters who went by the name Adeyanju Babatola revealed that there are three stages to the tax collection process and that the collectors receive a hefty sum of money from the transporters.
He claimed that they would make three payments per day to their local executive members, who would then make payments to the state executive members and then the state’s internal revenue purse.
But he bemoaned the fact that their executive members were using the outrageous and intolerable pay to extort money from them, telling them that whether they liked it or not, they had to pay the money.
A commercial motorcycle rider also suggested that his fellow riders were in a similar situation in their group and pleaded with the state government to assist them.
Speaking about the situation, Olawale Rasheed, the governor’s spokesperson, told our reporter that the current administration in the state, led by Senator Ademola Adeleke, had not yet been briefed on the development but had promised to look into it.
He claimed that the governor had already appointed park managers and that, following a thorough briefing on the subject, the review committee on transportation would resolve the issue.
In addition to promising that the current administration would not hesitate to correct any wrongs left over from the previous administration so that state residents could live comfortably and successfully, Mallam Olawale also affirmed that assistance would be given to those in need.
In Ekiti State, the situation is not different. Truck and haulage drivers in the state have said the increasing level of taxation by government officials in the state is abysmal.
The drivers explained that they were being subjected to a series of excruciating levies by government apparatus in the name of taxes in border towns.
One of the drivers, who simply identified himself as Joshua, said that local and state governments are also stationed at the entry points of the state with barricades to collect fees.
He stated that while officials of the local government collect between N1,000 and N1,500, they pay the state government around the same amount, and the drivers’ union collects N2,000 and issues receipts.
According to him, “We face a lot of taxes before delivering consignments to the state from officials at the point of entering the state. For instance, coming from Lagos to Ekiti State, we will pay in Oyo, pay in Osun, and also pay Ekiti State in different ways.
“This is really bad, and something should be done because these levies could be merged and made at least one, in the interest of business owners and society.”
Another driver, who requested anonymity, explained that the government shouldn’t be in a rush to raise its own revenue by putting onerous taxes on the defenseless populace.
“We are not saying it is bad to pay money, but what we are saying is that it should be moderate and not in as many ways as we presently have it. I must tell you the truth, It is confusing and excruciating,” he said.