AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
In Kaduna, only an authority named in law may collect a tax or levy, and the federal approved-list law makes it an offence for anyone else to do so, punishable by a ₦50,000 fine, three years in prison or both. Estate and vigilante charges set by residents' associations are private agreements, not taxes; any demand presented as an official levy should come with a receipt from KADIRS or the local government, and KADIRS has warned residents about impostors.
Insecurity has led many Kaduna streets, estates and markets to organise their own guards and vigilante groups, and someone has to pay them. That is how a monthly "security levy" can appear on a shop owner's door, sometimes from a residents' association, sometimes from a market union, and sometimes from people with no authority at all. This guide separates the three and tells you what to do when a demand looks wrong.
What the law says about who may collect
The Taxes and Levies (Approved List for Collection) Act sets out which taxes and levies each tier of government may collect. Its key rules:
- Only the appropriate tax authority may assess or collect a tax or levy on the list.
- No one may mount a roadblock to collect a tax or levy.
- Anyone who collects in breach of the Act commits an offence punishable by a fine of ₦50,000, three years' imprisonment, or both.
- The state list includes business premises registration fees (in urban areas up to ₦10,000 to register and ₦5,000 a year to renew); the local government list includes items such as shops and kiosk rates, tenement rates, motor park levies, signboard permits and refuse disposal fees.
Whether the 2025 national tax laws have replaced or changed this list is not settled in anything we read, so ask KADIRS which items it now collects. In April 2026 Kaduna also signed its State Tax (Consolidation) Law 2025, which harmonises state levies into a single system. If a demand calls itself a "security levy", ask the collector to name the law and the authority that set it.
Three kinds of security charge
| Type | Who sets it | Is it a tax? | What to expect |
|---|---|---|---|
| State or local government levy | KADIRS or your local government, under law | Yes | Official demand notice, payment to a government account, official receipt |
| Estate or residents' association dues | Members, by agreement or the estate's rules | No; a private contribution | Minutes or a written decision, an association account, a receipt |
| Market or trade union security charge | The union or market association | No; a private charge | Union receipt; it cannot be enforced as a tax |
Private dues can still be binding if you agreed to them, for example in your tenancy or estate rules. But they are not taxes, and nobody can lawfully seal your shop or seize goods to collect them as if they were.
Spotting an illegal demand
- The collector cannot show an identity card and written authorisation.
- Payment is demanded in cash or into a personal account.
- There is no demand notice or official receipt.
- The collector threatens to close your shop on the spot.
- The charge was never discussed by your association or announced by government.
In September 2024 the Kaduna State Internal Revenue Service warned that groups and individuals were falsely claiming to be empowered to collect taxes, levies and fines on its behalf, and said it had begun arresting some of them. It told residents to pay only through approved channels, namely designated banks and its official digital platforms, and to report anyone claiming to represent it without proper identification.
How to report
- Note the collector's name, the amount, the date, and any vehicle number or group name.
- Ask politely for the law and authority behind the charge, and for a written demand notice.
- Do not pay cash without a receipt. If you feel unsafe, pay nothing and leave.
- Report the demand to KADIRS through its official offices, or to your local government secretariat if the collector claims to act for the council.
- If you are threatened or goods are seized, report to the nearest police station and get a report number.
- Tell your market or trade association so others are warned.
If you run an estate or market association
Associations that collect security dues can avoid disputes by recording the decision at a meeting, opening an account in the association's name, issuing numbered receipts and sharing a simple statement of income and payments to guards every quarter. Clear records protect officers from accusations and make members more willing to pay on time. They also make it obvious when someone outside the association starts collecting in its name.
A worked example
Example only. A pharmacy in Ungwan Rimi pays its estate association ₦5,000 a month for night guards (a private agreement) and later receives a stranger's demand for a ₦3,000 weekly "security levy". If paid, that stranger's charge would come to ₦3,000 × 52 = ₦156,000 a year, more than double the ₦60,000 (₦5,000 × 12) the shop pays for actual guards. Asking for the authority and a receipt before paying is how you avoid that cost.
Where to read more
For your tax position as a small business, see small business taxes in Kaduna. Waste charges are covered in the KEPA waste levy, and other local tricks in common scams in Kaduna.
Questions people ask
Is security levy legal in Kaduna?
Only a tax or levy set by law and collected by the authorised body is official. Estate and union security dues are private charges, not taxes. Ask any collector for the law and an official receipt.
Who collects levies for Kaduna State?
The Kaduna State Internal Revenue Service (KADIRS) collects state taxes and levies through designated banks and its official digital platforms; local governments collect items on their own list.
What is the punishment for illegal tax collection in Nigeria?
Under the Taxes and Levies (Approved List for Collection) Act, a fine of ₦50,000, three years' imprisonment, or both.
How do I report fake tax collectors in Kaduna?
Record the details, refuse to pay without proper identification and a receipt, and report to KADIRS, your local government, or the police if you are threatened.
Sources
- Taxes and Levies (Approved List for Collection) Act, Laws of the Federation (PLAC) · accessed Oct 2026
- Peoples Gazette: beware of fraudulent tax collectors, Kaduna revenue service warns (13 Sep 2024) · accessed Oct 2026
- Channels TV: Kaduna signs tax consolidation law (11 Apr 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.