Emmanuel Nnamani, chairman of the Enugu State Internal Revenue Service (ESIRS), in this interview with REGIS ANUKWUOJI, spoke on the Enugu State tax reforms, laying out a roadmap for future fiscal administration, debunking allegation of imposing taxes unnecessary on businesses. He also detailed enforcement of the reforms, measures and transparency efforts in tax administration. Excerpts:
People are alleging that your ministry is arbitrarily imposing levies on businesses as taxes; how true is this?
The allegation that the ministry is imposing arbitrary levies is not true; it is misleading. The taxes and revenue in Enugu State remain within the limits of the law. No taxes or levies in Enugu State are impose outside the law. We do not impose any levy outside what the law permits. Tax administration in the state is guided primarily by the Personal Income Tax Act (as amended), which empowers the ESIRS to collect 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. While compliance among salaried workers has been largely smooth, the agency sometimes employs legal enforcement mechanism to ensure compliance among self-employed individuals.
What do you think about formalisation of the Informal Sector?
A key challenge has been that of bringing the informal sector, especially market traders and transport operators into the formal tax net. Upon assuming office, we discovered that an overwhelming 99 percent informal sectors were not remitting taxes to the state, largely due to the disruptive influence of non-state actors that engaged in illegal collections. In response, the state introduced a consolidated ₦36,000 annual levy for market traders. This amount, payable between January and March covers all relevant state level charges, including those by Enugu State Waste Management Agency (ESWAMA), Signage and Advertisement (ENSSAA), storage fees and Business Premises levies. Once this amount is paid between January and March, the trader owes nothing else for that year. Traders who fail to pay After March 31st, become subject to enforcement action. For the street vendors operating outside structured market and annual levy of N30,000 applies, with ESWAMA charges handled separately. Transport operators such as Okada riders, Keke drivers, minibuses, tankers, and trucks—operate under a daily ticketing system.
Observers are complaining that the approach to the enforcement lacks human face?
It is not true, although the law allows for 10 percent penalty on unpaid tax and interest charge tied to the Central Bank’s monetary policy rate of 27.5 percent. He said that the state adopted a softer, pro-business approach. Instead of the punitive charges, a flat N3000 penalty is applied in most informal sector cases to promote ease of doing business and encourage voluntary compliance.
It is alleged in many quarters that increasing cost of rents today in Enugu City is as a result of government taxation?
One cannot link it to taxation as erroneously claimed. The trend is a nationwide challenge driven by demand and supply, not state tax policies. For instance, my personal experience with housing inflation dates back to 2015, long before the current administration began enforcing tax laws. The shift from rental developments to private, residences with gates have reduced housing stock, increasing rental pressure. If we had more high-rise residential buildings, rent would drop. Government can’t regulate rent prices, but it can build to increase supply. Plans are already underway through the Ministry of Housing and Housing Development Authority to construct mass housing and student hostels near institutions like ESUT and IMT, thereby freeing up central city housing and helping moderate rents.
How do you ensure transparency in tax administration in the state?
In line with our commitment to transparency and digital innovation, we have a tax calculator on the official porter www.its.en.gov.ng allowing residents to compute their taxes with ease and clarity. This is about transparency and giving our people confidence. This is to foster trust and eliminate guesswork, inviting residents to compare Enugu tools with those in more advanced states like Lagos.
There is this claim that Enugu is expensive. How do you react to it?
I acknowledge the perception, but it is clarified that it is a demand-push inflation; it is temporary, with Enugu undertaking widespread infrastructure renewal including Smart Schools, Primary Health Centres and Hospital infrastructure; the surge in construction activities has led to increased demand for building materials like granite and rod, which are seen particularly in construction materials. Enugu sources granite from Ebonyi and rods from other states. Once these projects are completed demand will drop and prices will stabilise, I assure you.
Are tax reforms consistent with other states of the federation?
On a broader context, Enugu’s tax regime is not an outlier, but consistent with federal laws implemented across all states. We’re not here to compete with other states. Our duty is to apply the law fairly and ensure that our people prosper.
