AHMED MUHAMMAD: States with Autonomous Revenue Services Generate More IGR

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Ahmed Yakubu Muhammad is the Executive Chairman of Nasarawa State Internal Revenue Service (NSIRS). In this interview with Igbawase Ukumba, he speaks on efforts by the NSIRS to have a harmonised revenue law for the state, and other matters. Excerpts:

Recently, Nasarawa State was ranked 9th among the 12 ICT states in the country. How was that achieved?

Just like you asked how have we been able to achieve this feat, we have put in some many things in place and the most important thing first is the process automation. We have automated almost all our processes whereby we decided to stop cash payments. We don’t allow our staff to collect cash. We use payment systems through the central billing system. These payment systems are several, you can do bank payment, you can do online payment, you can do web payment through POS machines and other electronic payment. That is one!

Secondly, what we also did was that we sought approval from His Excellency to stop the usage of cash receipts. That is one other way whereby people can do some funny things and we got approval from his Excellency and we said, we are going to start that with the board of internal revenue before we can go to other MDAs. So what we did was to withdraw those manual receipts and since we have a platform where we can make payments through online medium or you can go to the bank and make payments and print an online receipt so there was no need for us to use receipt because in manual receipt, someone can just write any figure and collect anything they want.

So those are the areas whereby Government is losing quite huge amount of revenue. So we said we will do these things and block those leakages. These are some of the things we did and quite alright we are seeing improvement.

Some of your targets for revenue may not be used to the electronic payment of your board, therefore how do you engage people who are not ICT compliant?

That is why we say there is a bank payment. If they cannot use any of the payments, the banks are already there. They generate invoice even in the banks. So if the go to the bank as an illiterate and they say they want to make payments for the board of internal revenue, the bank will generate invoice for you and if they generate this invoice, we monitor it online. Any payment you make on the CVS, I can open it on the platform. So any payment made anywhere in the world, we can monitor that payment here. It will tell you that this particular person made this payment at this bank with this reference number whether it’s bank payment or through the POS or any means of payment.

Last year, you projected to generate N1 billion monthly. Have you reached that target?

We have reached that target of N1 billion and we are now targeting N3 billion. We have set another target of N3 billion and it’s achievable because Nasarawa has limitless opportunities and so, if we harness all our resources it is achievable and even above that. Just like I told you, the magic is automate your processes, block leakages and you will see improvement.

There are allegations that some states are not contributing significantly to the value added tax (VAT) of the country. What is the position of Nasarawa State on these allegations?

VAT is the exclusivity of the Federal Inland Revenue Service. It collects VAT on behalf of the federal government. VAT is generated in all the 36 states, including the FCT. So every transaction that is done, VAT is deducted 7.5 per cent now. So there is no state that is not generating VAT. As long as you do a transaction even if you go to a hotel and pay your hotel bills, you pay VAT. So anybody saying that some states don’t pay is not true, maybe some states are higher than others. Then the VAT is forwarded into the federation account whereby it is shared among the three triers of government which is the federal, state and local government.

What are the challenges of the board?

Well, we have a lot of challenges. First of all when it comes to the issue of payment of taxes, people don’t like to comply and you know the kind of environment we are and the people we have here. Secondly is the challenge of personnel. We don’t have enough personnel to cover the state. You can see a body like this with only about 145 staff. So we have to do with auxiliary or casual staff to complement what we have. Take about a 100 casual staff, even if you put over 200 of them in Karu alone, they can’t cover it. So that is one other area we are having issues.

Then, lack of autonomy. Most of the states in the federation that you see doing well are autonomous. It is one of the conditions they give to states because if you are collecting revenue, you are supposed to have what is called cost of collection to run your office because in terms of revenue you don’t sit in the office, you have to go out.

It is a field work and if you don’t go out, nobody will want to pay tax. If you sit in the office and expect people to come and pay, they won’t come, but if you have autonomy, it involves a lot of things. You say you are autonomous whatever you generate, 10 per cent goes back to you and it encourages you to generate more. It is from what you generate that becomes your running cost. The level whereby you only wait at the end of the month to get overhead, you are limited to certain thing. Even at that, it is what we are limited to that we are able to achieve what we have been doing. There are states that are even autonomous. Let’s take for instance, the North-central, it is only Nasarawa State that is not autonomous. So you can see that we would have gone far.

Apart from that, you can see the kind of building we are in. Since it was built, nothing has been done about infrastructure, mobility and so on.

Even with the COVID-19, we have already surpassed the year 2020 target of N1 billion. There is a target from the 2020 that was set for us and we have surpassed that.

Recently your board embarked on licensing vehicles on the roads of the state. Was it able to achieve its target?

License is road taxes. This is one area that is very difficult to run. These are the group of people such as Keke, Okada and so on. And the level of compliance, it is very low due to their level of literacy. So you have to be tactical and diplomatic. But we have made a lot of discoveries in that area. We have discovered a lot of fake number plates, fake vehicles. In fact we had to send police from Lafia up to Jigawa because we found out someone was producing number plate from Jigawa for Nasarawa State. So we had to go there and he was apprehended in Jigawa and brought here. The case is ongoing. So these are some of the things we saw. We made a lot of discoveries.

We have a platform here on why it is important for people to register because once you register and we capture the chassis number, once your details are captured, your name, phone number and all your details in case, if stolen and you report to police and police inform us, we will just red flag that this vehicle with the chassis number is stolen.

And because our platform is linked with Road Safety and other states in the federation, if that vehicle is taken to go and be registered and they put that chassis number, it will red flag there and it will inform them that it was stolen. So you can see the importance of this. We have apprehended so many stolen vehicles here. People don’t want to register their vehicles and this is something you register once. Some are adamant to do, but it is important because it is for the safety of your property.

If you look at the 12 top IGR generation states, Nasarawa is 9th on the list. How are you looking at Nasarawa State in the next five years regarding the ranking?

You see, there are two things. That ranking which you talked about is for improvement in revenue generation from the preceding year in 2019, which there is a rise of 43.5 per cent or so. Now what we are trying to concentrate is the volume of revenue we generate. From the next five years from what we have put in place, Nasarawa will be among the first five states. That I promise you.

Do you see any other IGR Source or sources that are untapped in the state?

Yes, absolutely! Apart from the board of internal revenue, there are 41 other agencies that generate revenue in Nasarawa State. We have MDAs that do. What we have realised and we are trying to curtail is that every MDA has a revenue head, which the state generates revenue and sometimes, you find out that they just pick out of five heads, which they are supposed to be generating revenue, they only pick two and leave three. So, you can see that there is also a source of revenue loss in the state. So what we have done now is to ensure that revenues are being completely collected from all these MDAs.

Secondly, we also realised that some MDAs still have some obsolete rates and fees which we inherited from Plateau State. They are still using now. We have done a draft copy of the harmonised law. We have reviewed the rates. It is in the Ministry of Justice and they are reviewing it. We want to have a harmonised Nasarawa State revenue law and from there, it will go back to the State House of Assembly to be passed into law. So you can see it’s an improvement in revenue generation.

Then, one other thing is the impediment of the law. Some of the revenue heads we have, we don’t have laws backing us to collect those revenue, so it is an impediment. That is why we decided to get inputs in all those MDAs that are collecting revenue. If you have any of these revenue heads that you don’t have laws backing you to collect, bring it to us, we will input it in the harmonised law, so that once the assembly passes it into law, we will be able to improve on our revenue collection.