THE ART OF TAXING POVERTY
Postcards from Nigeria’s business owners suffocating under the weight of arbitrary and excessive taxation.
SOMETIMES THEY THREATEN TO LOCK ME UP
At the end of last year, I was surprised when I got a bill from LIRS that I should pay close to ₦800,000 as a director’s assessment. I said, “What am I earning? Why should I do this?” They said, “Some people got some information about the school, blah, blah, blah.” Why should we be basing my tax assessments on people’s assumptions?
EXCESS TAX IS A BURDEN ON US
Failure to pay this money might lead to losing the space you sell to someone else. This is Lagos. People are in line to take over. Everywhere is always congested. I have been at this spot for four years. Sometimes, there would be sales. Sometimes, there wouldn’t be. But in either case, the levy collectors come for their money. I am talking about ₦1,500 – ₦2,000 each day, depending on how the market sales are. Most times, they could be the first ‘customer’ of the day.
I HAVE NO CHOICE BUT TO ADJUST PRICES
There have been cases where either my staff or I were overstretched to make unofficial payments. These requests are usually verbal. Nobody gives you a written document for such payments. They just tell you, “Oga, settle us,” “You need to pay this now,” especially from the unofficial ones. They have nothing to lose. No one would want their market worth thousands of naira to be destroyed or damaged because of ₦500. But at the end, those ₦500 payments amount to something tangible to them and a shortage for us.
YOU JUST PAY AND MOVE ON
There are days I receive a small ticket or paper as proof of payment. Other times, nothing is given. You just pay and move on. The problem is that those small tickets are not reliable because other people could come around later and demand payment again, even if you show them proof. You may settle one group in the morning, and before the day ends, another group arrives asking for something very similar. When you explain that you have already paid, they dismiss it and insist theirs is different. At that point, you are forced to pay again to avoid trouble because it would cost you more if refused.
THE STRESS OF UNCERTAINTY
You are selling, attending to customers, arranging your goods, and suddenly someone appears asking for money, not once or twice. Sometimes repeatedly. Standing in front of your goods and delaying you for 20 minutes could make you lose customers. If they cause a scene, people, especially customers, would avoid your stand because nobody wants to go home with an injury for what doesn’t concern them. Everybody minds their business in Lagos.
LIKE THEY KEPT MONEY WITH ME
As a seller and market woman, getting and retaining customers is not the only problem. Selling also comes with constant payments. Aside from the transport fare from my house to the market, ₦1,500 drops from me here often as usual payment. My feeding, clothing and other expenses are not involved as part of expenses yet, not to mention accommodation. And for a small business like mine, every naira matters. We all know how expensive that is. It affects my finances, affects my mood, and mental health.
GETTING A BUSINESS LOAN IS A BIG PROBLEM
We went into business hoping that the government would support us. But if you want to get a loan as a business owner, it becomes a big problem. If you want to apply for grants, it is also very difficult. Sometimes, the application window is almost closed before they even start advertising it publicly. Meanwhile, ordinary individuals on social media sometimes support business owners more than the government does. Even when you manage to see the opportunity, the process of getting it is very stressful. When the government collects taxes from us, the question is: what do we get back? What exactly does the Nigerian government give back to us as business owners?
CLOSED MY SHOP IN LESS THAN A MONTH
Within those two days, they came back and said, “If you don’t want to lock this place up, we are going to.” I was trying to heal, and they were creating another problem for me. At some point, a lady came to tell me that if I’d done normal, the boss would not have attempted to lock it. She said if I tipped him, he would give me some time to make the payment. She said that’s the only way she can help me.
WE DON’T KNOW HOW THE TAXES ARE CALCULATED
The way it has affected our revenue is that, firstly, we don’t know how the taxes are being calculated. We don’t have a formula — like this is what we are earning and this is what we are required to pay. We just pay as they bring their demand notice. I never envisaged these challenges. I didn’t even know that these kinds of challenges would be encountered. But as we grow, as we step into different levels, we see some of these challenges, and we just have to face them head-on and make sure it doesn’t affect the work we are doing.
SURVIVING AREA BOYS IN OSHODI
When you go to places like Oshodi to buy goods, area boys will ask you for money. When you are taking your goods from the market to the bus stop or taxi, they will stop you at several points. At each point, they collect money before you finally leave Oshodi. Sometimes they will stop you at three or four different spots before you get out of the market … These costs force us to increase the prices of our products, but at other times we cannot increase them because of competition. If I increase my prices too much, customers may go to other sellers.
The experiences shared by people affected by multiple taxation show that many Nigerians are not only struggling but also making enormous efforts to survive. Their stories exposed deep economic and financial pressures, and I could see their pain during the interviews. They are frustrated, exhausted, and drained.
Living in Lagos is already challenging, given the high cost of living, including accommodation, transportation, and other daily expenses. The burden becomes even heavier for people with families and dependents to care for. These challenges affect business owners in both the formal and informal sectors striving to keep their businesses afloat.
Many business owners explain that refusing to pay these multiple taxes or levies often results in greater losses. The damage to their business operations due to non-compliance could be more costly than the amount initially demanded, especially for people with market stalls. They are concerned that such incidents negatively affect customer patronage.
In a lot of cases, the monies collected from business owners in the informal business sector are neither recorded nor documented, while that of the formal sector could be without a proper breakdown of how the taxes were calculated.
These concerns highlight the need for both the federal and state governments to address the issue more effectively. Beyond introducing new tax laws, attention should be placed on implementation, transparency, and fairness.
— Damilola Olufemi.
Curated by: Damilola Olufemi.
Edited and designed by: ‘Kunle Adebajo.
This series was produced with support from Gatefield.
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