Africa: In Lagos, billions generated as ‘tax’ by road unions are never accounted for
As the commercial bus moved swiftly away from Abattoir bus stop inwards Tabon-tabon area of Agege in Lagos, the driver swerved dangerously into a crowded street.
Many passengers wondered why he would take a longer route and expressed their frustration.
Others lambasted him for making such a dangerous turning. But the middle-aged driver appeared unperturbed by the cacophony, his head slightly bent backward, eyes bloodshot.
Badru Kunle, the bus conductor, would later address passengers, mumbling some apologetic words. The journey from Abbatoir to Agege bus stop took an additional 20 minutes, after the detour.
Kunle would later tell PREMIUM TIMES about his decision to take a longer route, away from the checkpoints of transport union levy collectors stationed at the various junctions leading to Pen Cinema, Agege.
“You just have to be strategic in this Lagos,” he told PREMIUM TIMES’ reporter upon arriving Pen Cinema junction in Agege. “If you are not careful, you will end up working for the union. The ‘tax’ they take from us is too much.”
Upon being probed further, Kunle gave an insight into details of the ‘taxes’ collected by the transport union officials which they tried to avoid.
“If we go through the normal lane, I may have to pay about N3,000 or more,” he said in his native Yoruba. “I didn’t pay yesterday so I owe some of them and they will collect it violently. I will have to pay for booking for two days; I’d have to pay for tickets and then, annual levy.”
Like Kunle, road transport workers (commercial bus drivers, conductors, motorcycle riders, etc) in Lagos are at the mercy of the numerous union officials stationed at various garages and junctions in the city.
Many of the transport workers, who spoke to PREMIUM TIMES but do not want their names in print said it is almost as though they work to feed the greed of the union officials.
There are several unions that regulate the operations of the transport workers in Lagos and other parts of the country.
They include Accredited Motorcycles Owners & Riders Association Of Nigeria (ACOMORAN), Road Transport Employees Association of Nigeria (RTEAN) , and others. But the National Union of Road Transport Workers (NURTW) is regarded as the most popular of the unions.
As these unions regulate the activities of transport workers in garages and bus stops in Lagos state, top officials of the unions generate billions of naira, according to PREMIUM TIMES analysis.
Cat and Mouse Game
Lagos is a port city in Southern Nigeria, with a population estimated at 21 million in 2016, which makes it the largest city in Africa.
The city has since grown, with informal projections putting the population at about 23 million in 2018.
The city covers an immense area pegged at 1,171.28 square kilometers (452.23 square miles). With the population continuing to grow, the density is now around 6,871 residents per square kilometer (17,800 per square mile).
With the state’s large population comes a relatively huge number of road users and commercial transport workers.
Although there are no verifiable records of registered commercial vehicles in the state, including on the website of the state’s ministry of transportion, Lagos is largely considered to have the highest number of vehicles in the country.
In June 2018, the National Bureau of Statistics (NBS) estimated the total number of vehicles in the country at about 11.7 million with commercial vehicles holding about 58.08 per cent of the number.
According to the report, out of the 11.7 million vehicles, commercial vehicles were 6.8 million, representing about 58.08 per cent; private were 4.7 million (40.67 per cent); government vehicles followed with 139,264 (1.19 per cent); while Diplomatic vehicles accounted for 5,912 (0.05 per cent).
Earlier in 2016, Michael Olapade, acting Sector Commander of the Federal Road Safety Corps, FRSC, said one-quarter of the total number of cars in Nigeria are found in Lagos.
Taiwo Sunday, a commercial bus driver plying the Agege-Ikeja route, said payments made to the union officials without commensurate value for money is huge and many of the road transport workers often suffer in silence.
Speaking with PREMIUM TIMES in Ikeja, Mr Sunday said a number of his colleagues have been forced out of business by rapacious union officials.
“Many people get their buses on hire purchase basis and they have to deliver certain amount to their principals,” he explained. “But if you calculate how much goes into payments to union people in Lagos, it has forced many people out of this business.
“There are many people who got buses from people in the past but could not pay when bus develops fault because of the huge number of tickets you have to purchase before you can be allowed to work. It is pathetic. It’s a huge tax empire.”
A top member of road transport workers in Ikeja who would not want to be quoted for fear of victimisation told PREMIUM TIMES that the government ‘stylishly’ allows the unionists’ ‘reign of impunity’.
According to him, the huge money realised never get accounted for and it is one of the underlying causes of the incessant killings and rivalry among the union members.
PREMIUM TIMES findings showed that the fee varies from one zone to another.
A Keke rider in Lawanson, Surulere, told PREMIUM TIMES the amount paid in the Surulere axis is almost equivalent to the same paid by Chinedu and others in Ikeja. Ditto two other Keke riders in Ojo Alaba, Lagos.
They added, however, that on some occasions, they pay an additional weekly levy of between N100 and N150 for “maintenance” in their own route.
On his part, Kehinde, a commercial bus conductor who plies the Toll Gate-Agege lane, explained that the average amount paid by commercial bus drivers in the axis is N1,200.
He gave a breakdown to include charges on bookings and tickets for different sessions of the day.
He said, “We pay N600 for booking every day. Then we buy tickets three times daily, and each ticket goes for N200. We collect ticket for morning, for afternoon and for evening sessions. So the total is N1,200 although I personally don’t pay up to that because many of them are my long-time friends. I pay roughly N900 or N950 but I tell you, N1200 is the standard money paid by our people here.”
Another bus conductor, who plies the Sango-Iyana Ipaja lane, confirmed to PREMIUM TIMES that the average payment is N1,500 and N2,000, depending on ‘how violent’ the people stationed at each junction are.
For Okada (motorcycle) riders in Berger-Ojodu area, the average daily amount paid to union officials is N1,000, according to multiple Okada riders who spoke with our reporter.
In Mushin and Idi-Oro areas, Taofiki Egba, a union official said the average amount collected from them is N900, depending on their routes. “Some pay as low as N700 or even N800 daily,” he added.
Multiple requests to speak to officials of the Lagos State chapters of the NURTW failed in March and April.
Multi-billion naira industry
PREMIUM TIMES analysis showed that money generated by the transport unions, barring other irregularities in the collection process, is a little bit short of the internal revenue generated, averagely, by the state government through its relevant agencies.
The Bureau of Statistics puts Lagos as one of the states with the highest internal revenues in the country.
In 2017, a non-governmental organisation, BudgIT, said that Lagos State generated the highest internally generated revenue (IGR) in the year.
A research document by the organisation put the IGR of Lagos State at over N333 billion for the year, making it the highest generated nationwide.
In 2018, Akinyemi Ashade, the Lagos state commissioner for finance, said the state generated an average monthly revenue of N34 billion in the year.
“Based on our first quarter results, Lagos State has so far achieved an average monthly IGR of N34 billion in 2018 compared to monthly averages of N22 billion, N24 billion and N30 billion in 2015, 2016 and 2017, respectively,” he said.
However, the actual amount generated by the transport unions in Lagos remains vague.
An official of the transport union in Iyana-Ipaja who spoke with PREMIUM TIMES but sought anonymity, explained that the informality of the transport sector makes accurate data collection difficult.
He, however, added that there is an average of 150, 000 buses, 100,000 tricycles and 100,000 motorcycles operating in the state.
PREMIUM TIMES is yet to independently verify these figures.
But, with an average of 150,000 buses paying N2,000 daily, the union generates about N300 million daily from buses, if all dues are collected. 100,000 motorcycles and 100,000 tricycles also pay N1,000, respectively, averaging a minimum of N200 million from these sources daily.
PREMIUM TIMES’ rough estimation of the fund generated showed that a minimum of N200 billion is generated annually from these dues.
This represents roughly about 50 per cent of the state’s internally generated revenue in 2018.
First, in March and later in June, several efforts to speak to the Lagos Internal Revenue Service failed repeatedly as officials were largely evasive of this newspaper’s requests.
Illegal ‘tax’ collectors
Mr Kunle, the conductor, explained that the burden of the ‘taxes’ goes to the road users in many ways. This, he said, manifests in high transport fares.
For instance, he said, the transport fare from Agege to TollGate area should not be more than N100 or N150, but due to the numerous expenses incurred by commercial drivers, it could go as high as N250 or N300 during rush hours.
Chinedu, a Keke rider in Agidingbi area of Ikeja, told PREMIUM TIMES he pays an average of N1,100 daily, if he is able to avoid other minor payments.
According to him, the payments are not constant but every tricycle rider must cough out at least a N1000 daily. PREMIUM TIMES observed that the purposes of the payments are not clearly defined.
“I pay N500 to them for ‘Chairman money’”, Chinedu began, when asked to give a breakdown of the levy. “Then I pay N300 for ticket and N300 for booking.”
He explained further that aside from the money that goes to the transport union toll collectors, the local government officials too collect a separate levy from tricycle riders plying the Agidingbi lane.
“Sometimes, the local government people collect N300 for ‘development levy’ but we don’t know whether it gets to government,” he said.
PREMIUM TIMES’ findings showed that in Agege, some random members of the transport unions served as “tax” collectors for authorities of the Agege Local Government until recently.
Although officials at the local government declined comments, multiple Okada and tricycle riders plying Agege-Ikeja route confirmed the practice to this newspaper. This is in gross contravention of the National Tax Policy.
The National Tax Policy precribes that tax authorities shall ensure that core tax functions, such as 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.
The policy also stipulates that tax collection must not be done violently and unlawfully.
Levy or tax?
According to the National Tax Policy document, “tax” is any compulsory payment to government-imposed by law without direct benefit or return of value or a service whether it is called a tax or not.
Generally, the tax policy says that tax authorities shall ensure that their functions are discharged in an efficient and effective manner, without the deployment of violence.
Olufemi Olarinde, a senior tax analyst at the Federal Inland Revenue Service (FIRS), told PREMIUM TIMES that the money collected by the transports unions could not be strictly regarded as tax.
He said: “It has nothing to do with any government authority. It has no legislation backing it. It is just an association levy; that is only members of the association. It’s just like you being in NUJ and being charged levy, you can decide not to pay or opt out of that association.
“Government cannot collect that as revenue because it is not a tax. What you are saying is that government should collect more taxes from them (transport workers), provided they pay other taxes as they should.”
But Chinedu Bassey, tax analyst and civic campaigner at theCivil Society Legislative Advocacy Centre (CISLAC), argued that it is largely a matter of semantics, citing examples of the opacity that surrounds local government levy collections through agents and transport union members in parts of Lagos.
“The hidden truth is that they are cronies (of government) and there is no way that the government does not know about it,” he said. “When you talk to the government, they claim (that) it is their union, and they deal with their thing. Most times, the union often claim that they are collecting the dues for the government but at the end of the day, it is just a part that goes to the government and the government knows about it.
“So they claim that the other part that does not concern them is the association dues and whatever but if the government should provide protection for the people, it should also make sure that the people are not overburdened because these guys do not account to anybody. And if anybody dares challenge them, you are gone.
“Government would say that it is not tax, by the definition of tax. They claim it is not government officials that go out to collect this money but those are just semantics and we don’t need to go into the politics of whether it is called tax or not.
“But the government knows that a particular set of people are using their exposure to the powers-that-be to exploit people, whether it is called levy or dues and government is not stepping into the situation.”
Reacting to the highhandedness of the union collectors, Mr Olarinde noted that if there are complaints, members can opt out of the union and go to court.
“Are the associations compulsory? They can decide not to partake. If they force them, they can go to court,” he said. “It has nothing to do with tax; it is just a levy by a private group of persons. Once you agree that you are a member of the association, you are binded by their law.”
The tax expert argued, however, that there are some taxes that come in the form of levies too, especially at the state and local government and they are legilsated upon.
He gave examples of levies on radio/television licence, adding that it’s a tax “because tax has to be something collected by government and it must be compulsory.”
“If government provides you option that you can either pay or not pay, it can’t be (tax)… it can be a toll but not a tax,” he said. “If they (union members) complain, it is about the governance and not the association. It’s a governance issue. The only way to stop abuse of office is to go to court. Government cannot stop them (union leaders); members can exercise their power and remove them.”
Mr Chinedu said the major concern is that the practice of violent collection and unregulated spending among the leaders of the unions happens without checks and scrutiny. “Even the tax authorities do not feel concerned,” he lamented.
“If they say it is not their business because it is not the government, what happens if anyone goes around doing the job of policeman and the police force says they are not affected because it is not their business? What would happen? We will have a total breakdown of law and order in the society. The government needs to intervene. Such arbitrariness should be checked.”
On suggestion that government can intervene and generate money from the money transport workers collect as a union, Mr Olarinde noted that the law forbids government from collecting taxes from unions.
The NURTW, for instance, is a part of the Nigerian Labour Congress (NLC).
“As a union, they cannot pay tax,” Mr Olarinde said. “But if the union carries that money and invests it in a business, they will pay (tax). If they use the money to build a hotel and they are getting money from the hotel, they will pay. If they use the money for transport business and get income from there, they will pay (taxes).”
By Oladeinde Olawoyin