INVESTIGATION: Inside Oyo Transport Tax Scheme where Corruption, Violence Reign

In its reaction to the appointment, the Oyo state chapter of the Action Alliance said the government’s vision to reform the tax environment, raise revenue and instill discipline can “…only be achieved with people of integrity and noble characters at the helm of affairs of the system and not with controversial people, whose names send shivers down the spines of the people because of their notorious past.”

Mr Makinde stuck with the appointment, nonetheless.

Speaking later in March, Mr Makinde told participants at a Nigerian-American Business Forum in Tampa, Florida, United States, that huge investment opportunities readily await investors if they make Oyo State their next investment destination because of reforms, like the PMS initiative.

“The PMS issue is still ongoing but we are up to the task. We shall not waver in our quest to grow the Internally Generated Revenue of Oyo State without burdening our people with unnecessary taxes,” he said.

‘Burdening the People’

But contrary to Mr Makinde’s claim, PREMIUM TIMES’ investigation showed that the PMS officials have imposed a huge burden on taxi drivers, Okada and tricycle riders in the state with illegal taxes and levies, with attendant effect on residents who cough out higher fares.

Amoo struggled to pick up broken parts of his Nissan car’s wing mirror, his demeanor lifeless. He mumbled a few words of complaint, threatening to seek justice. The 35-year-old commercial cab driver had just engaged in a brawl with an official of the Oyo State Park Management System (PMS) on the busy end of Mokola-Roundabout area of Ibadan, the Oyo state capital.

It was midday in the first week of March and the sun burned the skin intensely. If Amoo felt the intensity of the sun on his body, he didn’t show it.

“This is cheating, corruption and pure injustice,” he lamented in a chat with PREMIUM TIMES, shortly after the brawl. Amoo spoke fiercely in Yoruba, and his words could barely mask his anger. He told this reporter that prior to the violent encounter, he had paid the statutory N200 levy. But soon as he was being threatened to pay an extra N100, he declined and was attacked.

“What these boys do everywhere in Ibadan is nothing but extortion,” began Amoo, amid sweat. “I paid the expected N200 levy already and I even gave the boys at Queens Cinema their own N100 for ‘Chairman Money’. But they were not satisfied and wanted me to part with the rest of the money in my pocket. How much have I even realised today for myself? They would harass us, break our side mirrors, and violently extort us here; the boys in UI will do theirs, same with those in Ojoo and Moniya. Do they want to kill us?”

Mr Amoo said he was disappointed because the state government promised that the PMS officials would treat them better than they were treated when the National Union of Road Transport Workers (NURTW) held sway.

Controversial PMS

In February, the Oyo State Government launched a new Park Management System (PMS) with the intention of instilling sanity in motor parks and boosting the state Internally Generated Revenue (IGR). The state’s Commissioner for Public Works, Infrastructure and Transport, Raphael Afonja, said the move would “block leakages” in government taxes and “double the state Internally Generated Revenue” (IGR). The government also sacked the leadership of the state chapter of the NURTW and proscribed the union. The government thereafter appointed Mukaila Lamidi a.k.a Auxilliary, a former factional chairman of the NURTW in Oyo State, as the Chairman of the State Motor Parks Disciplinary Committee.

The appointment of Mr Lamidi, a staunch supporter and political ally of Governor Seyi Makinde, has been a subject of controversies. Opposition elements and other stakeholders have raised concerns about his appointment, because of his criminal past.

In 2016, Mr Lamidi was sentenced to six years’ imprisonment for conspiracy to murder and involvement in a crisis that claimed the lives of many Oyo residents. Between 2005 and 2011, Mr Lamidi and the late Lateef Salako (aka Eleweomo) were factional leaders of the NURTW, who battled erstwhile chairman, Lateef Akinsola (aka Tokyo) over leadership tussle, with incessant violent attacks at motor parks.

Mr Salako was killed in 2010 ahead of the 2011 general elections, and Mr Lamidi took over leadership of his faction of the union. The incessant mayhem reached its crescendo on June 4, 2011, when scores of Ibadan residents

In its reaction to the appointment, the Oyo state chapter of the Action Alliance said the government’s vision to reform the tax environment, raise revenue and instill discipline can “…only be achieved with people of integrity and noble characters at the helm of affairs of the system and not with controversial people, whose names send shivers down the spines of the people because of their notorious past.”

Between February and May, PREMIUM TIMES investigations showed that officials of the PMS acted in contravention of sundry tax regulations, collected taxes and levies from cab drivers without accountability mechanisms, extorted cab drivers, motorcycle riders and bus drivers across the state, and acted in ways that exposed the state to loss of legitimate revenues.Posing as a passenger, this reporter worked closely with a ‘Micra’ cab driver and moved around different parts of the capital city for weeks. On the first day of the trip, at the popular Challenge Round-About, the driver paid N200 to officials of the PMS, which they tagged “Owo Seyi” (Seyi’s Money). He was issued a receipt.

But still at Challenge area, shortly after moving away from the Round-about, he was compelled to pay another N50 as “Owo Ita”. Upon moving away from Challenge, the cab driver paid another N100 to violent members of the PMS at Mobil Bus-stop, then an extra N50 at Dugbe, then N100 at Queen Cinema, and later N50 at Mokola Round-about.

Receipts of levies

When the cab got to Sango, he was forcefully made to pay another N50, and then N50 at the University of Ibadan Main Gate. At Ojoo, he was forcefully made to pay another N100 and finally, at Moniya, he paid another N50.

“For those of us plying Moniya-Challenge or Dugbe-Moniya routes, apart from the N200 we pay for government’s ticket, we pay roughly N700 to these boys on a single trip,” the cab driver, who requested anonymity for fear of victimisation, lamented to PREMIUM TIMES in Yoruba. “The government knows about this; they know that Auxilliary boys are the ones in charge and they are all NURTW members disguised as PMS or Task Force.”

PREMIUM TIMES’ investigation established that “Owo Seyi” (colloquially named after the governor, Seyi Makinde), is the statutory levy imposed on transport workers by the Makinde-led government when it sacked the state chapter of the NURTW. According to a breakdown of the government’s levy, Okada and tricycle riders were expected to pay N100 only for daily ticket, while ‘Micra’ cab drivers and buses were mandated to pay N200.

However, PREMIUM TIMES confirmed that “Owo Ita”, also called “Owo Chairman”, is the illegal tax burden placed on the transport workers by the PMS officials, ostensibly earmarked for “the Chairman”, Mr Lamidi. This newspaper also found that the PMS officials were more aggressive in the collection of “Owo Ita” than they were in the collection of the government’s statutory levy.

“They are more aggressive because they don’t account for ‘Owo Ita’ and there is no ticket,” Baba Oyo, a cab driver who plies the Beere-Oje route, told PREMIUM TIMES.

Multiple commercial bus drivers, Okada riders, and Micra drivers who spoke to this newspaper also confirmed several cases of harassment and extortion in the collection of Owo-Ita.

Corruption, Extortion Galore

On May 5, commercial vehicle drivers plying the Oja’ba-Omi Adio route in Ibadan, the state capital, suspended operations to protest the extortion of members by “Auxilliary’s boys”.

Thereafter, the levy imposed on transport workers was increased with renewed promise to stop incessant extortion by PMS officials. The new levy showed that the N300 levy for buses was increased to N500 daily while Taxi and motorcycle/tricycle drivers and riders were compelled to pay N300 and N150, respectively

But rather than arrest the situation, the extortion and racketeering continued.

On 12th and 13th of May when PREMIUM TIMES moved about the capital city and Oyo town, commercial drivers lamented the situation and cried for help amid poor earnings.

“We still pay N50 at every junction between Oke Padre and Ojoo,” Ezekiel Dayo, a commercial cab driver, told PREMIUM TIMES. “This morning, I paid twice at Oke-Padre, thrice at Roundabout, then Sango, UI and Ojoo. The extortion is worse

Others attributed the gradual rise in transport fare in parts of the state to the extortion.

“The fare for Moniya to Ojoo should ordinarily be N50 but we charge N100 sometimes because the money we pay to these task force boys is too much,” Kola, a driver, told this newspaper.

Mutiat Ajao, a passenger who also lamented the increase in transport fare, attributed the challenge to the extortion and racketeering. She urged government to address the situation.

Ticket Racketeering, Lost Revenue

In some other parts of the city like Oje-Gate and Yemetu, PREMIUM TIMES investigation showed that PMS officials engaged in ticket racketeering by refusing to issue ticket to commercial tricycle riders, despite collecting both the statutory levy and the illegal tax dubbed “Owo Ita”.

On two occasions in April, two separate Okada riders who took this reporter from Olunde to Isale-Ijebu paid N300—N100 as statutory levy and N200 as “Owo Ita”—-to PMS officials in green uniforms at different junctions without being issued any tickets.

In other parts like Idi-Arere, whenever it’s past noon daily, Okada riders without tickets are violently made to pay N500 as fine. On April 15, this reporter witnessed how an Okada rider was beaten by Task Force/PMS officials in Idi-Arere for refusing to pay the N500 fine.

Jamiu Sikiru, an Okada rider at Popo Yemoja, told this newspaper that the officials sometimes issue fake tickets to commercial tricycle riders. “If you move from Kudeti to Odinjo, from here (Popo) to Iya Modina, you would hardly see them issue tickets or receipts. Yet they collect money on behalf of the government.”

Kareem Adedayo, a resident and policy analyst, said the development means that Oyo loses so much to illegal taxes and extortion despite its taunted PMS reform.

“What this has shown is that the PMS is flawed from inception,” he said. “By appointing people with questionable antecedent into the PMS scheme, due to political considerations, the Oyo state government lost it completely. Millions are being lost to these boys everyday. If you flush out an opposition faction of NURTW and appoint a loyal faction for tax collection, what difference does it make? Do you know what these funds can do to development plans in Oyo state?”

For Baba Iseyin, a bus driver plying the Sango-Eleyele route, the new ordeal in the hands of the PMS officials amount to betrayal on the part of the government.

“I think the Oyo State government deceived and betrayed us with this PMS thing,” he began in Yoruba. “It appears quite worse and the extortion is now more brazen. I, for instance, pay N1,200 or more sometimes. It will be difficult to see any transport worker that prays for the government today, due to what we experience in the hands of ‘Auxilliary boys’.”

Another driver, nicknamed ‘Eba Kala’, told PREMIUM TIMES he plies the route along Moniya, Ojo, UI, Sango, Roundabout, and Dugbe, where he pays N50 naira at each junction.

PREMIUM TIMES investigations revealed that on that route, transport workers pay “Owo Ita” four times every day: early morning between the hours of 6 to 11am; midday between 11 and 1’o clock; afternoon between 1 and 5pm, and late hour by 6pm till dusk.

Aggressive Taxation, Meager Resources

Despite the massive loss in legitimate revenue occasioned by the extortion in the road transport sector, Oyo struggles to meet its infrastructural challenges amid shortfall in revenue and depleting federal allocation.

The impact of the coronavirus pandemic has led to a drastic reduction in allocation accruable to states of the federation. As parts of measures to cushion the effect of the pandemic, the Oyo state government has had to device several means of beefing up its revenue base through sundry taxations.

In May, in a bid to grow revenue, the Oyo State Government launched a digitized Certificate of Occupancy(C of O) issuance platform, obtainable at N6,000. Earlier in January, Mr Makinde declared that his administration would ensure that Oyo’s IGR is able to offset its recurrent expenditure before the end of his tenure. While giving a keynote address at the one-day Tax Stakeholders ‘Poverty to Prosperity’ Summit held in Ibadan, the governor said that the IGR per capita in 2018 stood at below N3,000 per person.

“We can definitely do better,” he said, adding that government has been able to raise the IGR from about N2 billion to N2.7 billion in November 2019.

“Without adequate revenue there will be no resources to fund the budget; the state will have to resort to borrowing for recurrent expenditure or owing for overheads, which is never ideal.”

In May, the state assembly approved Mr Makinde’s request to borrow N20 billion to fix infrastructure, and the governor said the request became expedient due to dwindling revenue from the federation account and low IGR.

Mr Adedayo lamented that taxes and revenue lost to illegal collection and extortion by PMS officials could be used to plug the revenue shortfall. “The whole thing speaks to what political consideration can do to governance,” he said. “The shortfall can be fixed with illegal taxes Auxilliary’s boys pocket with brazen impunity, all in the name of working for a reformed government.”

Violating Tax Laws?

Speaking further, Mr Adedayo argued that the conduct of the PMS official contravene basic tax regulations, citing portions of the National Tax Policy document.

According to the National Tax Policy document, tax authorities shall ensure that their functions are discharged in an efficient and effective manner, without the deployment of violence.

The tax policy also states that 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 analyst questioned the appointment of both the “Consultant” and the Auxilliary-led committee, adding that the use of force and violence by Mr Lamidi’s boys was condemnable.

This newspaper’s efforts to speak to Mr Lamidi-led committee failed. Similar efforts to have the Oyo State Government comment on the revelations proved abortive.

When contacted in April, Taiwo Adisa, the Chief Press Secretary to the Oyo State Governor told PREMIUM TIMES to speak to Mr Afonja, the commissioner for works. When this newspaper reached out to Mr Afonja in April, and later in May, he promised an interview appointment. But over two months after the promise, with reminders sent to his known telephone numbers, he failed to agree to the interview.

Chinedu Bassey, programme officer for tax justice at Civil Society Legislative Advocacy Centre, CISLAC, argued that the shortfall and leak in the Oyo State PMS scheme could contribute immensely to the tax revenue and IGR if blocked and directed to the coffers of the state. Mr Bassey lamented, however, that due to political considerations, leaks in government tax administration are often ignored to the detriment of the poor people who are over-taxed and over-burdened.

He said: “We have always been talking about this type of reform especially with regard to revenue mobilization at the state but unfortunately, it’s been business as usual. The issues around tax and revenue mobilization are used for political patronage and settling of cronies. Sometimes, commitments are made but in the long run, you’d realize that nothing is done; it’s just a change of name.”

Mr Bassey called on the people to speak up and demand accountability to enable government effect genuine reform that would affect their lives positively. He added that the objective of the Oyo state PMS initiative would remain a dream if the avenues for leakages and extortion are not effectively blocked and the funds used to develop the state.