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Mixed reactions as Osun govt secretly increases tax of informal workers by 130.5 per cent

OSUN, Nigeria – The increase in the flat-rate tax for informal workers in Osun State, which comprises artisans and peasants is currently generating mixed feelings in the state.

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While it has not been clearly ascertained if there is a new tax regime in the state that also affects formal workers who are on PAYE platform, confirming the proposed increment for informal workers through a document emanating from the Osun Internal Revenue Service.

A letter dated 7th November 2019, which was signed by a senior official of the agency, one Mr Abiodun Olaitan on behalf of Chairman/ CEO of Osun IRS was obtained by our Correspondent over the weekend, which notified managements of tertiary institutions in the state of a new tax regime in the Ivory Towers.

Our Correspondent also sighted an internal memo in one of the higher institutions of learning in the state, informing Provosts and Deans of Colleges and Faculties respectively about the increment.

Meanwhile, the Chairman/ CEO of Osun IRS, Mr Gbite Ademikanra, when contacted on phone to get his reaction denied that there is a new tax regime in the state.

He explained that there was no plan by the agency to jack up taxes meant for any resident in the state, including informal workers.

Ademikanra said: ” I don’t know what you mean by over 100 per cent increment on tax meant for informal workers. How much are they paying before, how much are they paying now?

“There is no increment sir, what we do for informal sector people is based on their income, except I know your income now, I wouldn’t be able to determine how much you will pay.

“So, I did not issue any document like that informing anybody of increment in tax, such document didn’t come from my office at all”.

However, the import of the letter, which is on Osun IRS letterhead, coupled with an internal memo in the said higher institution of learning clearly indicates a new tax regime.

The circular from the agency, titled: ‘Compliance and Enforcement of Taxes in The State Of Osun ‘ which was addressed to management of tertiary institutions in the state reads in part: ” With reference to our earlier circular letter of January 2018, on the urgent need for parents and guardians to pay taxes. I wish to inform all managements of higher institutions in the State of Osun to be fully involved in the exercise.

“For clarity sake, the tax payment is ‘NOW’ Three Thousand Naira, and CPDL is Five Hundred Naira only, totalling (N3, 500) per year. Therefore, for three(3) years, each student is expected to pay a total of Ten Thousand Five Hundred Naira(N10, 500)”.

Internal memo from one of the higher institutions of learning in the state, which was signed by the bursar and titled: ‘REVIEW OF TAX CLEARANCE FEE’ reads thus:” This is to inform the general populace that the State of Osun has reviewed the amount payable as taxes per annum from One Thousand Five Hundred Naira(N1,500) per annum to Three Thousand Five Hundred Naira (N3,500) per annum.

“Therefore, for the three (3) years, each student is expected to pay a total of Ten Thousand Five Hundred Naira (10,500). Each student must collect the E-payment receipt and certificate as evidence of payment “.

When later confronted with the contents of the quoted circulars, the IRS’s chairman quickly said:” There is no increment. I can’t confirm that the letter was written to inform provosts and Vice-Chancellors the need for parents to pay tax.

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