The new Executive Chairman of Benue Internal Revenue Service, Mrs. Mimi Adzape-Orubibi, spoke with George Okoh about the challenges faced by BIRS in tax collection. She however said with the new innovations and her resolve to ensure transparency and accountability in the handling of government revenues, tax collection in the state has significantly improved. Excerpts:
What are you doing differently from what those who held this position before you did in order to boost tax collection in Benue state?
Well, firstly, on assumption of office about six months ago, I introduced the Point Of Sales (POS) system, in the collection of taxes. Before now people printed their own receipts and diverted the money that was supposed to go into government’s coffer. But with the introduction of the POS that issue has been addressed permanently. We are also saving cost in the printing of receipts because the device has its inbuilt receipt. There is also transparency and accountability in the handling of government’s revenue. We now enjoy public confidence in what we are doing. The Ministries, Departments and Agencies (MDAs) of government are also not left out. We have introduced the use of POS devices to them. The policy exempted the consultants or agents we engaged, who have been given targets to meet and since we are in a contractual agreement with them we exempted them from the policy because they collect the revenue and remit monthly to BIRS accounts what we consented to in our contractual agreement with them. The accounts they pay into is a non cheque account. Once money is paid in, it’s automatically transferred into the Accountant General’s account. Nobody is permitted to handle cash anymore. We have brought in a lot of changes. Before now the MDAs had numerous revenue accounts. What they were doing was that they pay into such accounts and withdraw at will. Section six of the Revenue Administrative Act of Benue State, section six (i) stipulates that we should close all the revenue accounts that MDAs were operating which were not opened with authorisation. So I wrote the banks and the MDAs to close such accounts in line with the provisions of the Act. They argued that they were operating such in order to have money to procure things. We however disagreed with them. We pointed out to them that they receive overheads for such purposes and if what they receive was not enough, they should write and inform the government. I did not allow that because how can they generate money and use it at will. It will not allow us have a comprehensive report of our revenue strength. All monies are supposed to be revenue consolidated. So if they had continued with the old practice the Accountant General and I would not know what was actually coming in.
How did the MDAs receive the new policy?
They resisted it and the matter went to the State House of Assembly, which told them the position of the law and directed them to operate only with the BIRS account in 23 banks in the country, we call them the collecting banks. They collect revenue and at the end of the month BIRS moves the entire revenue to the government’s accounts for disbursement. That we’ve done and it has helped us to block leakages because even as the Executive Chairman of BIRS I do not have access to the accounts because they have no cheques. So after achieving that, my next move is to look inward. I discovered that my staff members have not been trained for years. I want to train them in order to prepare them for the task ahead because we have been given a monthly target of N1.5billion by the Governor and we are determined to achieve that. The strategy I have adopted is to trickled down the target to each department and unit. I was able to divide it among the offices and they are conscious of it. All the Area Tax Officers know it and they have been given targets and if you don’t meet your target somebody else will take over from you. And to encourage us to work hard, the government has placed us on five percent of our Internally Generated Revenue (IGR) collection. You know what that means, the more collections we make the better for us. Though the percentage is not enough, because today we have 74 units, 28 Area Offices and four zonal offices and we pay rents on all these offices. BIRS owns the building of only four of these offices and they are situated where rents are low. So we pay our rents from that percentage and also take care of several other issues and logistics. That is the more reason why we must work very hard. We want to thank the governor because before now we were flat without that provision but he thought it wise to introduce it in order to help us meet our obligations.
How have you been able to convince the people to respond positively to tax payment?
Suffice it to state here that we have also dedicated time to create awareness about our tax laws. We know that there is a missing link in that area because the people have been complaining about taxes. In fact when I came in about six months ago, I adopted the strategy of feeling the pulse of the people on some of the gazzetted tax laws like the borehole and emission taxes and the feedback I got was a cryout from the people. However for any amendment to be carried on such laws, which were actually passed by the previous administration, we have to approach the House of Assembly in order to give such laws a human face. We are also looking at bringing construction maintenance charged, which will enable us collect rates from heavy duty trucks. In doing that, we will erect weighing devices to take the tonnage of the goods they carry at every exit point of these trucks. With that we will check the activities of hoodlums who stand on the roads with sticks harassing drivers of heavy duty trucks in the state. We are making a presentation to the Executive Council of the state with a view to making a law to that effect and by so doing ensure that the right amount is paid as taxes by the truck drivers who daily visit our markets to buy various food stuff and other goods. In fact in the days ahead we are also looking at collecting such taxes electronically to ensure transparency and accountability.
Which areas are you facing more challenges in your assignment ?
We are having challenges with the MDAs, the reason being that some collect revenues and do not remit to the coffers of government. They do not have targets unlike the BIRS. Section 24(8) (a) of the Revenue Administrative Act of Benue State says we should assess all taxable persons chargeable with tax in Benue state, while subsection (b) says collect, recover and pay all revenues into the consolidated revenue account. So we have to collect, because we own all the revenue sources but they the MDAs have to do their professional jobs while the BIRS does the collection at the point of payment. We are taking most of these things up because Section 12 (6)(8) of the BIRS law are explicit. (6) says if the Board deems it necessary it will appoint consultants, agents and accountants to collect all revenue from all MDAs. Subsection 8 permits us to make these appointments in exclusion of the MDAs. It is explicit. So that is where we have issues. My staff members work with targets unlike what you have at the MDAs. My consultants also work with targets. If they fail, we will take steps to recover the money in line with our contractual agreement. But I cannot do that to the MDAs if they fail to bring in money. They are not under pressure to deliver but I am under pressure to deliver. My mindset is my target while their mindset is to collect salaries at the end of the month whether they deliver or not and nobody queries them. So of late there hasn’t been a good relationship between them and us because they see us as people who have come to collect their jobs. They claim that one is working and another is ‘chopping’. I told them no, nobody is ‘chopping’, the money goes into government coffers for the payment of salaries and the provision of necessary infrastructure for the good of all. The contention got to a point that I was summoned by the House of Assembly but after presenting my case the House saw reason with me. We are all working for the same government. They are now claiming that BIRS has incapacitated them that they cannot work because we are collecting all the money. Yes we are. They get overheads, which are for them to use. My major concern is that revenue collection must follow due process and eventually get back to where it should go, which is obviously to the Accountant General for onward distribution. That was my major challenge but I believe we have understood each other on that matter now.
Another of our challenge is funding in the face of scarce resource, but the Governor is doing his best because the wage bill of the state is so high and the allocation that comes to the state is so meagre and unable to meet the wage bill. Yet the Governor is doing his best in that regard. Maybe we may still do another biometrics to ascertain the astronomical wage bill. On our part, we are witnessing a steady growth in our collections. And in all that we do we abide strictly to the provisions of the law. I vividly recall that when I was appointed, the Governor personally told me that we must apply ourselves to the law and by so doing not run foul of the law. That is what we are doing in BIRS. Every action we take is pursuant to carrying out our responsibilities and we take cognizance of the provisions of the laws guiding our duties.
There is this contention that the tax rates in Benue state are higher when compared to other states; a particular reference is the vehicular license taxes, why the disparity?
That is completely wrong. It’s not true; our rates like in other states of the federation are Joint Tax Board (JTB), approved. We cannot for any reason collect anything above the JTB approved rates. We have all our rates openly displayed in our offices for every prospective tax payer to see. From available records we are doing far better than our neighboring states and several others. When people claim that some persons run to neigbouring states to have their licenses renewed I tell them it’s not true, the reverse is the case because from available records we are doing better than those states and this is because we enjoy much more patronage given the transparent manner such issues are handled in Benue state.
On the issue of tax clearance, the rule is that individuals are supposed to file their income statement indicating their earnings from January to December. I’ve gone out severally to tell the people that they are supposed to file in their tax returns between January and March that is the deadline. But if you do it from April, the law says you will pay N50,000 as an individual because you are filing late while an enterprise pays N500,000. I want to also state that we are currently publishing a local news magazine, which we distribute for free wherein we take time to enlighten the people on different taxes and the rates they are to pay and at what given time. We also include the hotlines of those we engaged as consultants and agents and every other thing that the public should know so that they are not cheated by anyone or even our agents.
So when you have not filed as stipulated by law we apply best of judgement in arriving at your tax. There are rates in percentages that apply to your incomes depending on the amount involved. Now, it will surprise you to know that Nigeria’s Pay As You Earn, PAYE, rate is the least when compared to other countries. We deliberated on that at our last JTB meeting in Kano. Even with that, people are still complaining. The fact is that if you don’t file your returns, we assess you on our own based on best of judgment as provided by law. The onus rests on you to declare you income to enable us prepared your tax clearance. Moreover even when you declare, we also write to our bankers to alert them before it is processed and given to you. It is not something you get off the shelf. So what I’m saying in essence is that when we apply best of judgement to arrive at the payable tax, we do it without recourse to your income, so it’s discretional and you have no reason to complain. But if things must be done rightly you must tell us how much you earned and in case you do not have income so to speak, we assume that you earned 100,000 for three years so as to enable us raise a clearance for you. But the fact is that people always complain when it comes to taxation. So what we do is to apply ourselves to the provisions of the law so as to be properly guided and be able to defend yourself at every given time.
There is the issue of people who reside and work with cooperate organisation in the state but are not able to get their tax clearance because their tax deductions are made at their head offices, how can that issue be addressed?
The right thing is that such organisations ought to deduct the taxes and remit same to the tax board where the employee is resident so as to qualify him for a tax clearance in that state. If that is not done, I’m afraid the affected persons may be compelled to pay another tax in his state of residence to qualify for the issuance of a tax clearance certificate in that state.