© 2019 - International Centre for Investigative Reporting
How payment of multiple taxes frustrates okada riders in Abuja
DANIEL Chogwu, 33, had moved to the Federal Capital City, Abuja from Kogi State in 2014 in search of a paying job with his high school certificate. Unable to earn a pay after being owed three months’ salary working as a security guard for a firm in Abuja, he started looking for his next best option.
Several of his friends who were commercial motorcyclists advised him to try Okada riding temporarily till he finds a better job.
Fast forward to 2020, Daniel works from 5 a.m. to 6 p.m., six days in a week as a full-time commercial motorcyclist plying the Nyanya – Mararaba axis.
On a good day, he says he makes about ₦2,000 daily but on some other days, he comes home with as low as ₦800. Because of his meagre earnings from the “Okada” business, he spends frugally.
But no matter how small his daily income is, he is charged an average of ₦250 on taxes weekly which he pays to the Abuja Municipal Area Council, AMAC.
If he fails to pay the levy of ₦50 daily before 2 p.m., his motorcycle would be confiscated and he would have pay to pay ₦1,500 to get it back.
“Since I started this business in 2014, I’ve been buying tickets and paying one tax or another but I don’t know why we are paying because it has not benefited me in any way. All they [the tax collectors] are after is to collect money from us, sometimes with support from the police, and they would seize our motorcycles if we don’t pay,” he said angrily.
His experience is not different from the plight of commercial motorcyclists operating in satellite towns and rural areas in the Federal Capital Territory, FCT whose motorcycling taxi business is stifled as a result of paying multiple taxes and levies enforced by transport unions and government agencies.
Nigeria is the second-largest market for commercial motorcycling in Africa, providing an alternative means of employment for the 231,544 unemployed residents of the FCT according to a 2018 data published by National Bureau of Statistics, NBS.
But this group of workers pays more in tax than their counterparts who earn better income.
Eyes on Ground
The ICIR reporter visited five locations in Nyanya where tax agents of the Abuja Municipal Area Council, AMAC operate. As early as 8:00 am, they are out issuing ticket and collecting daily levies from commercial motorcyclists.
Mopol Junction, Redeemed Junction and Nyanya market are some of the popular routes commercial motorcyclists within Nyanya axis ply daily and tax agent are stationed at various spots to collect the stipulated ₦50 every weekday from Monday to Friday.
Though the activities of motorcyclists are not allowed within Abuja’s city centre, they operate within the suburbs providing an alternative means of transport for ease of movement in areas where they are unrestricted.
At Nyanya phase 4, policemen usually accompany the officials of AMAC to collect taxes from commercial motorcyclists plying the route.
In Lugbe, the trend is the same except that there are three different bodies that collect levies from commercial motorcyclists namely Motorcycle Transport Union of Nigeria, MTUN, Amalgamated Commercial Motorcycle and Tricycle, Owners, Repairers and Riders Association of Nigeria, ACOMORAN, and Federal Capital Territory Authority, FCTA.
The levy ticket for “Okada” riders in Lugbe is accompanied with a printed receipt to acknowledge payment made by a commercial motorcyclist usually from Monday to Saturday every week.
TechSci Research, the New York-based global research firm forecasts that the commercial motorcycling market in Africa is expected to surpass the $9 billion mark by 2021. It is uncertain how much revenue the “Okada” business generates for the Nigerian economy as there are no publicly available records to that effect.
However, Lagos state motorcycles transport unions were estimated to have generated ₦4.7 billion from 304,229 registered commercial motorcyclists in 2015 according to a report.
In his early fifties, James Madaki is a tickets agent who rarely smiles while working for AMAC’s motorcycle revenue collection office in Nyanya. He struggles to wake up by 5 am daily and drags himself to the road, his job is to sell tickets to motorcyclists on AMAC’s behalf for a commission.
James is not on the payroll of AMAC, if he does not go to the road to sell tickets then he will be broke.
For every ticket he sells he earns a commission of ₦10, he acknowledges that this amount is small but it is better than being idle. If he hits the road very early, he could smile home with ₦1,200 for the day which he says doesn’t happen often.
“I always wake up very early so I can sell these tickets and get my money for the day. This job is very demanding because I have to be on the lookout for “Okada” riders and persuade them to buy from me so I can eat and government can eat,” he said.
However, the National Tax Policy recommends that tax establishments shall ensure that primary tax functions, which include assessment and collection of taxes, are only carried out by career tax administrators who are public servants and not by ad-hoc consultants or agents.
Wisdom, a lanky ticket agent who holds the forte at Mopol junction, in Nyanya declined to disclose his surname to The ICIR but confirmed that he was not a full-time employee of AMAC but a hired hand.
“If I was a permanent staff of AMAC do you think I will stand in the sun to collect this change,” he queried.
Bassey Ekpo, a commercial motorcyclist in Nyanya said in October last year when he failed to pay the levy before 2:00 pm because his motorcycle was faulty, the council tax officials confiscated his motorcycle.
Despite his plea, they refused to listen to him until he completed the payment of a fine of ₦1,500 before he could get his motorcycle back. He said he does not know who takes responsibility for the welfare of commercial motorcyclists because of several unions and government agencies have printed receipts to collect taxes.
“There are different groups all collecting taxes and even when the police arrest a motorcyclist there is no group that will speak out for the person and they are all printing receipts to collect taxes. And when you default on paying the tax they will violently make life difficult for you,” he said.
Tony Elumelu, chairman of Heirs Holdings in a report stated that multiple taxations and inconsistent government policies affect Small and Medium Scale Enterprises, SMEs competitiveness and their ability to attract capital in their investment climate.
“It seems we have a big problem, because, with high taxation and multiple levies, it is expected we should have very high tax revenue,’’ he said.
Thriving motorcycle startups in Lagos state were faced with taxation problems in 2019 when the state government initiated a new regulation, including licensing fees, required for the motorcycle firms to operate as part of local transportation infrastructure.
Under the proposed regulation, each startup will pay an annual licensing fee of ₦25 million per 1,000 bikes and then ₦30,000 per bike after the first set of 1,000.
A move criticised by economic analysts saying that apart from the government-imposed taxes, transport unions also collect taxes from the startup firms which could cripple their business.
Sabir Mohammed does not own a motorcycle, so he remits ₦1,500 daily to the owner of the motorcycle he uses for commercial operations within Lugbe. He is unsure why he has to pay a compulsory levy that does not benefit him.
“After I make the daily returns to the person that owns the bike I ride, when I pay those levies buy petrol and attend to all these small expenses what is left becomes my profit for the day. I still don’t know why we pay those levies every day,” he said.
Ifeanyi Emmanuel, head of motorcycle revenue collection at AMAC’s office in Nyanya does not share the same view. Speaking to The ICIR he emphasized that most of the motorcyclists they collect taxes from are illiterates who don’t have the slightest idea of taxes.
“Most of the motorcyclists are not literate enough to understand the intricacies of this tax because for example there is a contributory scheme the council has organized for motorcyclists to support them if there is an accident we give them support to help them back on their feet. It is just that many of them are not keying into the scheme,” he said.
“Apart from that, the council is providing employment for youths through their taxes, the ticket agents that assist us in collecting these taxes, it is from that money they are paid,” he stated.
Ifeanyi’s area of tax coverage is from Nyanya to Karshi, he told The ICIR that data collection was a bit sketchy but the number of commercial motorcyclists registered with his office was about 1,500 members.
“Most of the riders who come from Nasarawa state and even as far as Niger state to do their motorcycle business on our roads if they are included I will say we have about 10,000 motorcycles within Nyanya – Karshi area,” he said.
The ICIR contacted the chairman of Motorcycles Transport Union of Nigeria, Nyanya chapter, but he declined to comment, saying he was very busy. The ICIR asked to know how the association spends the tax collected from his members, he dismissed the question.
Daniel’s “okada” business was supposed to be his ticket to easy money until he gets a better job but the reverse is the case. However, six years after waiting for the “better job” he believes his only choice is to keep working hard and to keep paying the taxes, hoping someday taxes will be utilised for the benefit of Okada riders like him.
“If they are using the money they collect from Okada riders then there would be no worries. When an accident involves an Okada rider, for example, you will not find any official of the union who will assist with the medical bills,” he said.