The Chairman of the Abia State Internal Revenue Service, Uche Elekwachi, has clarified that the ongoing reforms in the state’s tax administration are not aimed at increasing taxes, stressing that the agency does not have the authority to introduce or reduce tax rates.
Elekwachi, who made the clarification on Tuesday during a briefing with journalists at government house after the weekly exco briefing, said he assumed office in June 2026 and could therefore not have introduced new tax rates and circulated them within such a short period.
He explained that the major focus of the present administration was to integrate revenue collection systems, eliminate cash handling and block revenue leakages, rather than impose additional taxes on residents.
According to him, significant cash collections previously took place at vehicle licensing offices, creating opportunities for revenue diversion and manipulation.
He explained that where a taxpayer was expected to pay ₦10,000, officials could collect ₦20,000 and remit an amount of their choice to the government at the end of the month.
He said the government consequently ordered the integration of vehicle licensing offices into the state’s revenue collection system to ensure that payments were properly documented and traceable.
The revenue chief noted that individuals who benefited from the old cash-based system could naturally resist the reforms and circulate misinformation because the new system was uncomfortable for them.
He also clarified issues surrounding Tax Clearance Certificates (TCC), stressing that there had been no increase in the cost of obtaining the certificate.
According to him, the new tax administration process is based on the provisions of the new tax law, which took effect this year and is expected to bring further changes from next year.
He explained that a Tax Clearance Certificate is not merely a payment receipt but evidence that a taxpayer has been properly assessed and has fulfilled their tax obligations.
He said the previous practice where individuals paid ₦30,000 for an entire year as tax clearance did not necessarily reflect their actual income or tax obligations.
The official said the government now has access to a federal system through which taxpayers’ income can be verified using their Personal Identification Number (PVN) and other relevant details.
He explained that applicants seeking TCC may be required to provide their details so their actual income and tax obligations can be determined.
According to him, some individuals who were asked to provide their financial details discovered that their actual income ran into millions of naira and subsequently declined to continue with the process.
He stressed that the state was not imposing a new charge but was simply insisting that taxpayers comply with applicable tax laws.
He added that individuals who provide the required information and are properly assessed could, in some circumstances, obtain their clearance without making additional payments where their assessment shows that no payment is due.
The revenue chief further explained that where taxpayers refuse to provide the necessary information, the law allows the authority to conduct what is known as a “best of judgment” assessment.
He emphasised that the process was based on federal tax regulations and was not a system created by the Abia State Government.
On land transactions, Elekwachi said the government was also introducing uniformity into the assessment process to eliminate disparities and arbitrary charges.
He recalled that previously, a person could be assessed to pay ₦10 million for a transaction in Umuahia, while another person could undertake a similar transaction in Aba and be assessed at ₦1 million.
He said the ongoing reform was aimed at establishing a single and transparent system of assessment across the state.
He acknowledged that middlemen who benefited from the previous system were likely to resist the reforms, adding that such resistance was responsible for some of the misinformation surrounding the exercise.
The revenue chief further stated that there had been no increase in Pay-As-You-Earn (PAYE), land taxes or vehicle-related taxes.
“There are no increments whatsoever. No increment on PAYE, no increment on lands, no increment on vehicles,” he said.
He explained that less than five per cent of taxpayers actually require Tax Clearance Certificates, noting that many of those who seek them do so for major transactions or official purposes.
He questioned the practice whereby someone could purchase land worth ₦20 million and subsequently seek tax clearance by paying only ₦30,000, or spend millions of naira on an international vacation while declaring a minimal annual income for tax purposes.
He said such practices were inconsistent with the principles of tax assessment and applicable laws.
On traders and market-related charges, Elekwachi explained that the harmonised demand notice already incorporates storage and other applicable fees chargeable to stores.
He stressed that the charges were not newly introduced by the current administration, noting that they were based on a tax law enacted before the present leadership assumed office.
He said the reforms were intended to establish a transparent, uniform and accountable revenue administration system in Abia State while ensuring that taxpayers understand what they are required to pay and the basis for such assessments.
The Abia State Government has also clarified that harmonised charges paid by shop owners are determined based on the category and nature of their businesses.
The government explained that the payment is a consolidation of business premises-related charges designed to simplify revenue collection for traders and business owners.
According to the government, rather than having multiple officials or agencies visit shops to demand different payments, business owners can make the required payment at a single point and obtain clearance.
It explained that the system was introduced to eliminate multiple collections, reduce harassment of traders and make revenue administration more transparent and convenient.
The government stressed that the applicable amount depends on the category of the shop or business and is not an arbitrary charge imposed on traders.
