Need for Abians to embrace the New Digital Tax System for Transporters and Traders for Seamless Revenue Payment and Collection


On Monday, the 2nd of July, 2023, Abia State Governor, Dr. Alex Chioma Otti, OFR launched a new digital tax system for transporters and traders in the State. The aim of the new tax system is to eliminate all forms of manual collection of revenue, fraud and middle men in revenue collection. It is also introduced to block revenue leakages, increase the revenue base of the State, help in the ease of doing business, attract local and international investors, unlock the true potential of the tax system of the State, maximise revenue for development projects in the State and help the government fulfill its campaign promises to the people of Abia State.

Following the formal launch of the new digital tax regime, the Governor, Dr. Alex Otti and his Special Adviser on Internally Generated Revenue (IGR), Mr. Chimereze Okigbo held a town hall meeting with stakeholders in transport and trade at Government House, Umuahia; where these stakeholders were intimated on the modalities of the new tax payment system.

Governor Otti, while speaking at the Town Hall meeting informed that, “The whole essence of digitalizing the tax regime is to eliminate all forms of sharp practices including fraud, diversion of proceeds and eliminate middle men.” According to him, this process is unlike what was obtainable in the past, “where people were empowered to collect taxes and revenue for government and declare whatever they intended to. Some of them were given targets and whatever they collected above the target entered into private pockets. Here, we want to do things differently and you will agree with me that the world has changed.”

The system would register every trader in the market and every commercial vehicle operator. Also, all the assets used in the business, including motor parks, Bus, Taxi, Keke or Okada would all be registered and the owners and drivers be linked to the system and would help in solving the issue of security. Both traders and shops in the markets would be enumerated. When registration is done, the system would generate an ID, in form of account number which would be used in making tax payments. Gladly, the government is not increasing the amount of tax paid by these individuals because of the economic situation at present.

Every tax payer must have an Abia State Social Security Number (ABSSN) Card and every payment made in the State; whether hospital or motor vehicle inspection is imbeded into the card. Also every commercial vehicle would have a digital sticker that could be scanned to validate the original owner and other necessary information whenever the need arises.

Furthermore, the system is carefully designed to empower the people and it will lead to employment generation and give impetus to transparency and accountability in all the revenue collections process which is part of the social contract of Dr. Alex Otti and to Abia People, with the commitment on the side of the Governor that every Kobo collected must be accounted for and used for the development of the State. The new tax regime is equally designed to give confidence that payments made to the State government actually gets to government’s coffers. The new system also integrates free medical insurance scheme for all commercial vehicle drivers and riders of Keke and Okada.

It is important to note that the automation and digitalization of the Internally Generated Revenue is not just revenue collection but a process of enumeration, collection. monitoring and evaluation. It implies that there may not be need for what is popularly known as enforcement by taskforce as the intention is that everything will be an automated process so that at a click of the button, one would know whether he has paid or not.

Indeed, the new digital tax system essentially would sanitize revenue generation in the transport sector and the markets. While the Permit to Operate Tickets targets those in the transport business, the Innovative Traders Tax Payment targets traders in the market areas. Unlike in the past where revenue agents abused these daily tickets, the present administration is promoting transparency and ease of compliance to tax payment.

It is interesting to note that the transporters and traders would have various payment options. The Permit to Operate Tickets for Transporters has been designed in bouquets which gives the commercial transport operators options to choose among the daily, weekly and monthly scheme. This model would certainly eliminate the risk of extortion, increase tax compliance and strengthen ease of doing business in the state. Those who choose paying on daily basis, would pay normal rate but those who choose the weekly, monthly and yearly payment options, would get a discount.

In the same vein, the new framework for Innovative Traders Tax Payment is carefully designed within the ambit of the principle of convenience and fairness. This model gives the traders in all the major markets the benefit of prorating their annual market levy in monthly, quarterly, bi-annually or annually. A thorough consideration was made to accommodate this model so as to cushion the effect of economic hardship and business cycle volatility.

Truly, Abia people and residents are in for a more seamless process in revenue collection as the new tax process is user friendly and anyone that makes use of a cell phone, whether internet enabling or not would access it. The receipts would be digitally generated and sent through SMS and email while those who care, can print out their receipts too. Additionally, government would profile agents and place them at various locations to assist in this digital driven tax system to make it seamless.

It is worthy to note that this new tax regime would culminate into the Treasury Single Account (TSA); where all revenue of the State would be domiciled in one account with effect from 1st September, 2023 as announced by Governor Otti.

However, in order to communicate this new tax regime and its methods to the understanding of the people, particularly, commercial drivers, operators of tricycles popular known as Keke na Pepe and traders in our various markets, government would engage more discussions, sensitizations and orientation on these tax payers.

There is therefore need for various stakeholders in the revenue generation in the State to embrace the newly introduced digital tax regime for transporters and traders in the State launched by the transparency oriented Abia State Governor, Dr. Alex Otti for better and more convenient revenue payment and collection.

Divine Nwankwo