Henry Kissinger, a renowned former US Diplomat said that the success of any government is its ability to bring about new realities. When President Buhari in his quest for a new beginning, ordered a forensic audit into the activities of NDDC from inception to date, little did political influencers in the region imagine it would come to fruition. When he took a further step by directing the Minister of Niger Delta Affairs to inaugurate an Interim Management Committee to create the enabling environment for the audit, they broke the secure locks of hades and unleashed ancient demons to invade television houses and game newspaper columnists with vile propaganda. There is nothing as powerful as self-interest of political god fathers in the Niger Delta Region. The insularity of high positions has shielded them from the problems of the common man which are basically existential. They have betrayed the people, shared their common patrimony generally and particularly in NDDC being an interventionist agency.
The time to give account has suddenly arrived like an unforeseen hurricane and they are unprepared. As it has dawned on them that we now live in a world where our digital foot and fingerprints follow money trails in a very exponential manner, they have gone into panic mode and are openly engaging in reverse logic under many aliases to the consternation of the Nigerian public. Even their interpretation of events leading to the setting up of the Interim Management Committee has been somewhere on the spectrum from “incomplete” to “inaccurate”.
It is a shame that these people who fawn in the presence of the President have gone to great lengths to recruit front men who are dim and impermeable to reason to wantonly disparage what is clearly a simple executive action meant to improve an embarrassingly ineffective agency. It is a pity that they do not have sufficient sense and taste not to mistrust the President. For the people of Niger Delta Region, our trust in his judgment is marrow deep because he has demonstrated that he is on the side of the people not special interest. Nothing can kill our enthusiasm for the new direction the President has envisioned for NDDC.
These oppressors of the masses of Niger Delta who are opposed to the audit have been speaking through their puppets with manufactured warmth and smile of concealed avarice trying to cajole us to reason with their unreason. Of all Satan’s forms of trickery and deceit, the very greatest is persuading man that he did not exist. There is no need reiterating that NDDC under the underhand control of the buccaneer political god fathers was synonymous with heist. A hawk with a song is a hawk no matter how it pretends to be a songbird. They are just afraid of the consequences of their illegal and ruinous takeover of the Commission not that they are remorseful nor have they learnt anything. They are incapable of any good and cannot change any more than a zebra can change its stripes. They are answerable only to the mammon gods of their pockets and must be resisted at all costs. The Committee must be allowed to work and the audit must proceed as ordered.
Our Governors requested the audit and are happy that a Committee has been inaugurated to manage the affairs of NDDC in the interim. Our people have been asking for the audit and now that it is about to begin, we support it. The vast majority of Niger Delta people also support that the Committee prepares the ground for the audit, work with the auditors until they finish their work, liaise with the auditors to lay down proper and clear ground rules for the conduct of affairs of the Commission before handing over to a new board that would start its work on a clean slate. This is the minimum we expect from our loving President. Those who are opposed to this do not represent us. They cannot pretend to serve us without us. As the South Africans say: nothing about us without us. The immediate take-over of the Commission by the new board they are proposing does not represent the wishes of the people. It is a “sugar coated Satan Sandwich” If you lift the bun you will not like what you see. Their parochial agenda has long been exposed.
It is very satisfying that the Committee under the leadership of Dr Joi. Gbene Nunieh is already inspiring confidence and hope. It is a settled fact that her competence, confidence, fearlessness and excellence which naturally recommended her for the job is glaring. A leader of quiet determination with skills and capacity to build a team, she has remained calm, talking less and taking tough decisions. As a result of the Committee’s work, Nigerians now know that a serving Senator is managing about 300 contracts out of which 120 have been fully paid for and 87 of them are awaiting payments. The Committee has stopped the monthly payment of N1bn (One Billion Naira Only) Consultancy Fees for a job the Commission is duly equipped to do. Under her watch, high sense of duty and values are returning to the Commission. She has confirmed that more than 55 contractors have gone back to site in just one week. An even larger number of contractors have indicated their willingness in wrting to return to work once the rain subsides towards the end of November because of the peculiar and challenging terrain of the region.
The potential for job creation when most of the abandoned projects are reactivated is best imagined. She asked all the young men that hang around the Commission to go back to their communities where they would be properly engaged and they complied because they trust her. She has stated that resources saved from reckless and wasteful expenditures would be diverted to providing mono pumps to give people in the rural areas drinking water which they severely lack.
The Committee to our delight is liaising with member State Governments to ensure that our children study in proper classrooms, taught by teachers who have been properly taught themselves. The members being high achieving individuals understand that our children must be prepared to compete and succeed in the new world economy. They are critically analyzing the health and infrastructural policies of the Commission to ensure that no oil producing community is left out or behind.
The region is blessed with abundant human and material resources but its potentials have largely remained what they are, just potentials. In the midst of abundance, the region has remained stagnated with majority of its people living in pitiable conditions and abject deprivation. The lands of the geese that lay the golden eggs are now viewed as wastelands because an agency such as NDDC which was established to support State Governments drive developments in the region has been strangulated by the activities of confused and extremely corrupt elites with limited sense of purpose. The elites lacking strong and viable base in production, turned it into its primary instrument for primitive accumulation of wealth and would stop at nothing to let the status quo remain.
It is refreshing that the Commission through the Acting Managing Director is insisting that it begins to give hope to the hopeless, strength to the weak, job to the unemployed, good health to the sick, upliftment to the downtrodden, education to the illiterate, sustainable living to the poor, access roads and waterways to the forgotten people of the hinterlands and pride to the region.
She is urging the leaders in the region to let the power of love for our people overpower/overcome our love for power over our people. This is absolutely amazing.
This agency which suffered from the syndrome of fatal procrastination that sealed its fate and put it on the path of perfidy is experiencing fresh air of good deeds. We worry that the antics of moochers and men with insatiable greed who drove it to near collapse if left unchecked and unrebuked may slow down this onward march to a new dawn of limitless opportunities. The President should not let it happen. It’s a thing of joy for us as Niger Delta people that the Commission in under the supervision of the Ministry of Niger Delta Affairs headed by our son who is known for his unmatched culture of excellence and delivery of what he proposes.
We challenge the Minister and members of the Committee not to be undaunted, not to give up or give in because the destiny of millions of our people are in their hands as agents of change. We cannot afford to make our future look like our past. They must blaze a path that would ultimately illuminate new pathways and they would forever remain in the favour of a grateful region.
–––Ejiro Jomafuvwe, a public affairs commentator writes from Sapele, Delta State.
FIRS and Four Years of Reforms
n August 2015, President Muhammadu Buhari appointed Mr. Babatunde Fowler as the new acting Executive Chairman of the Federal Inland Revenue Service (FIRS). Before the appointment, Mr. Fowler had been the Executive Chairman of the Lagos State Internal Revenue and is credited for significantly increasing the tax revenue of the state by over 500% within a period of 10 years. The primary mandate of the new leadership at the FIRS was to increase tax revenue collection at the national level which, as at then, was one of the lowest in the world in terms of tax to GDP ratio. In addition, the FIRS leadership was expected to introduce reforms that will make the tax system more efficient.
The new FIRS Chairman immediately expressed his desire to see a sharp increase in the tax revenue collection by FIRS. He expressed confidence that the FIRS could greatly increase its collection figure. He consequently unveiled the focal areas of his mandate. These include: 1.) Full compliance from the organised private sector – he was going to ensure full compliance on tax filing and remittance by the end of the year. He noted that some multinational companies and banks were not fully compliant and he also cautioned other businesses that operate shady and manifold records to henceforth desist from such acts. He stated that businesses must operate honestly and legally, keeping proper and accurate records.
2.) Restructuring of the FIRS – he mentioned that the Revenue Service will restructure its service to focus on different sectors of the economy with particular emphasis on the non-oil sector in order to diversify the country’s heavy reliance on oil revenue.
3.) Collaboration with the State Boards of Internal Revenue – he stated that greater information sharing and exchange of information will take place to achieve the goals of increased revenue generation from taxes across board. He proposed that FIRS and states tax authorities explore the possibility of joint tax audits of businesses.
4.) Advance corporate tax payment on interim dividend – In line with the provisions of the Companies Income Tax Act, the FIRS was henceforth going to demand any company paying interim dividend to pay 30% of the gross distribution to the FIRS as advance corporate income tax.
5.) Technology in tax administration – FIRS and JTB will explore ways of enhancing tax administration through technology as this will simplify tax compliance, reduce cost of collection and help expand the tax base.
6.) Tax amnesty will be declared for noncompliant taxpayers subject to government’s approval.
7.) Stakeholder engagement – there will be regular interactions with taxpayers, tax consultants, professional bodies, organised private sector and law-makers to explore areas for improvement in the tax system.
The quest of the FIRS to achieve these objectives resulted in more aggressive revenue drive, intense audits and investigations. FIRS has gone after companies that have been evading taxes.
In 2015, it was estimated that about 75% of companies operating in Nigeria were not registered with the FIRS while about 65% of those that were registered were not up to date with their tax filing and payments. That made the effective rate of compliance then to be less than 10%.
But through series of reforms, the story has changed significantly. There is a renewed focus on tax revenue following significant decline in oil revenue due to the prevailing low price of crude oil. Besides, the tax to GDP ratio was extremely low so increasing revenue generation through tax became critical. The new FIRS leadership has helped to drive and improve tax administration in the country despite the inclement economic climate. The various initiatives articulated by the new FIRS leadership have helped to bring visible changes in tax administration in Nigeria.
Taxpayers now know that the FIRS has become more aggressive with tax collection. Many taxpayers have accordingly reviewed their level of compliance and promptly rectified any identified non-compliance. The FIRS has also become more sophisticated in its approach in going after perceived cases of noncompliance. This has involved intelligence gathering and adopting a risk-based approach to audits and investigations rather than simply focusing on multinational corporations and other large and visible taxpayers that are already in the tax net.
A strategy for the informal sector and the “hidden” economy as well as a robust tax policy framework is ongoing. The cost and time required to comply with tax obligations has been drastically reduced as Nigeria in 2015 ranked 187 out of 189 countries on the ease of tax compliance (based on time required to comply) according to the 2015 PwC/World Bank Paying Taxes Survey. A positive movement during the last four year period is Nigeria moving up 25 points in Tax Administration Section of World Bank ‘Ease of Doing Business’!
Another significant innovation brought to best by Fowler is the introduction of lien on accounts. To ensure tax compliance, FIRS, through court, started putting lien on accounts that are not within the tax net. It started off with N1 billion and above. Then, it took it down to N100 million and above.
On that, it had initially 7,793 accounts. Many have come to reach an agreement with FIRS and N31.7 billion has been paid to date. Those with N100 million to N1 billion are 34,943. A total of 2,148 have paid N40.8 billion. The FIRS have generated N72.5 billion from less than 2,500 people in a two-month period. People have criticized the decision by the FIRS to place lien on peoples’ accounts as highhanded, and hurting businesses but it is what the law actually says that the agency can do – it should put lien on the account and based on the amount the FIRS has specified, it should be credited straight to the government’s account in Central Bank of Nigeria.
The FIRS did not even follow that all through. It just put a lien and left the money in their accounts. When the owners came and showed their records, FIRS now knew how much exactly they were owing. Many decided to pay in installments, and they drew up an installment payment account.
So, FIRS was not being highhanded at all. States tax boards are much more heavy handed when dealing with any such tax infractions. Under the FIRS, things were done differently. The N72 billion recovered when shared among the 36 states of the federation, plus FCT will surely make significant difference.
Overall, the Federal Inland Revenue Service led by Mr Babatunde Fowler in the last four years has arguably outperformed its predecessors when necessary indices are considered, despite the recession. Non-oil revenue during the period rose, but a fall in oil revenue tax was mainly because of the sharp fall in both price and production of crude oil. While FIRS management had control of non-oil revenue collection figures, oil revenue collection was subject to more external forces.
Given that there was a slow down in general economic activities, tax revenue collection (CIT and VAT) being a function of economic activities, were negatively affected. But the series of strategies and initiatives adopted like ICT innovations, continuous taxpayer education, taxpayer enlightenment, have helped to ensure improved revenue collection. For the benefit of the Federal Government, 36 states and Abuja.
––– Mr. Mohammed, a retired civil servant, is based in Abuja.
Pix: Babatunde Fowler.jpg