May 30, 2019

A former Deputy Governor of the Central Bank of Nigeria, Obadiah Mailafia, has said that the Lagos State Government is using corrupt consultants to collect tax from the people. Mailafia, who described the act as daylight robbery, called on the people of Lagos to rise against such extortion and corruption. The former CBN deputy governor said this during an interview on Channels Television’s Sunrise Daily on Tuesday. Mailafa, who praised Lagos for being able to increase its Internally Generated Revenue, said there was room for doing things in a better, transparent and more effective manner. He lamented that tax consultants in Lagos receive as high as 20 per cent commission in some instances which was against the norm in other advanced climes. Mailafia said when the people see that their taxes are being put to good use, they would be willing to pay more hence the spike in IGR during the administration of former Governor Babatunde Fashola. The former CBN deputy governor said, “Lagos which was the poster child for success in internally generated revenue, still has a lot of issues there. I love Lagos but of course, Lagosians were very reluctant to pay more tax but when they realised Fashola was doing a lot of work, they were more than happy to pay. “But there is a problem. The cost of extracting this taxation is one of the highest in the world. They have invited very dubious consultants who keep between 15 to 20 per cent of this tax. I think it is a form of iniquity and I don’t know why for the life of me, Lagosians tolerate that nonsense. “It is their money and it is daylight robbery. Employ people, train them; let the government collect the tax, not private consultants. In France, there are schools dedicated to training people in public finance and tax administration. These are the people you should set about to collect your taxes, not some iniquitous and corrupt private consultants.” Several petitions have been submitted to the Economic and Financial Crimes Commission in the past detailing alleged fraud by some tax consultants in Lagos State. However, the EFCC has failed to invite anyone including the petitioners.   Source: Punch

A national consensus seems to have emerged that increasing the Value Added Tax (VAT) rate at this point will deepen the economic misery of the average Nigerian already overburdened by the yoke of broken social infrastructure. For the hard-pressed workers, such proposition will only mean that the government is desirous of retrieving with the left hand what it just gave out, albeit grudgingly, with the right hand by way of the recently approved minimum wage which many states may not even be able to pay.  Besides, government, at all levels, has failed to discharge their obligation in the social contract as can easily be seen in collapsed social infrastructure and worsening insecurity across the land. Given the foregoing, the only reasonable idea on the table is to widen the tax net. The idea becomes more plausible against the background of the latest reports by the Federal Inland Revenue Service (FIRS) that it has captured the identities of 45 million individual and corporate entities. The milestone was made possible by the resolve of the federal tax authorities to shift focus this year by putting more energy into the enumeration of taxpayers through TIN (Tax Identification Number) registration exercise. To achieve this feat, the FIRS had to synergies with other government agencies like the Corporate Affairs Commission (CAC), Nigeria Inter-Bank Settlement System (NIBSS), Nigeria Identity Management Commission (NIMC), Federal Road Safety Commission (FRSC), among others. This is partly a fulfillment of the original promise of the idea of having an integrated national database. Indeed, the imperative of having to explore other revenue sources cannot be overstated considering the perennial volatility of the oil price in the international market and the necessity to wean the nation of overdependence on oil revenue for sustenance. The urgency of this need will surely become even more manifest in the times ahead as the already financially stressed federal authorities grapple with the challenge of seeking funds to deliver on the approved N8.9 trillion budget for 2019 and the state governments having to shoulder additional financial burden arising from the new minimum wage of N30,000. It is commendable that the FIRS has been able to improve on its performance by automating its processes to not only cut operational costs but also curtail abuses, leakages and wastes in line with international best practices. We see this as one of the reasons for the steady growth in the national tax revenue in the past few years: from N3.3 trillion in 2016 to N4 trillion in 2017 and N5.3 trillion in 2018. What makes the rising graph quite significant is that it happened when the national economy was supposed to be contracting on account of the deleterious effects of the recession that hit the nation, from which it only began to show signs of slight recovery in the last quarter of 2017 after two years. With a unified database, we can only hope that the FIRS will address widespread complaints from the public against multiple taxation and arbitrariness of some of its officials. Added to this is an ethical issue. There have been complaints also by high net worth individuals of being slapped with arbitrary tax demands based on information obtained clandestinely from their bankers. Such complaints are quite legitimate. It is important that FIRS is mindful of such ethical issues while seeking to mobilize revenue for government to fund growth and development. According to the Manufacturers Association of Nigeria (MAN), widening the tax net will reduce the huge burden placed on the narrow tax compliant segments of the populace and corporate entities, many of whom are manufacturers.   Source: This days

When the ongoing integration of different biometric databases in Nigeria is completed, it is anticipated that the figure on the taxpayer database will grow to 45 million individuals, inclusive of corporate payers. In essence, the taxpayer database has expanded from 10 million that was inherited by President Buhari in 2015 to 35 million as at the end of 2018. Disclosing this at the quarterly world press conference held in Abuja, Mrs. Zainab S. Ahmed, Honorable Minister of Finance, said that through reforms at the Federal Inland Revenue Services (FIRS) and the Joint Tax Board (JTB), government have been able to harmonize the Tax Identity Number (TIN) database to cover Federal, States and LGs to establish a unified identity number system for uniquely identifying tax payers. Considering that revenue growth is a strategic priority for the Ministry of Finance, Ahmed further said that the Strategic Revenue Growth Initiative (SRGI), which was launched in Abuja Wednesday, January 23, 2019, is a key aspect of government strategy to improve Non-oil revenue through fiscal buffers, and ultimately improve the Revenue to Debt Service Ratio and to improve the ratio of Non-oil revenue to Non-oil GDP. “A set of initiatives have been itemized in the SRGI to increase the country’s revenues across all revenue types. This is to ensure that the whole of government is focused on revenue generation,” she stated. Among the initiatives in the SRGI is the National Single Window (NSW) which is expected to significantly improve the revenue performance of the Nigeria Customs Service (NCS) when implemented. Speaking further in an interactive session, the Honorable Minister said: “Four to five years after implementation we expect NCS revenue to double. This will come from the blocking of the leakages, improvement in the efficiencies in our ports and borders, the rehabilitation of scanners as well as the infusion of new scanners in the ports trading ecosystem, and it would also be due to increased rate of physical examination, reducing the physical examination to fasten the business of the ports.” The single window, according to her, would also help to bring to the barest minimum the issues of trade mis-invoicing, which is not only a drain on customs revenue but also a drain on tax revenues.  In the light of the above, the Federal Executive Council (FEC) approved Project Lighthouse, an initiative of the Ministry of Finance that uses Big Data Analytics and other advanced data mining technologies to better profile individual and corporate taxpayers. In her explanation, it was clear the data would be mined from various sources including lead registries, banks, the Corporate Affairs Commission (CAC), the Central Bank of Nigeria (CBN), the Federal Road Safety Corps (FRSC), among others. Ahmed also disclosed that all of these would be aimed at better identifying defaulting tax payers to optimize tax collections. Stating further she said: “Going forward, we plan to launch Project Lighthouse that seeks to use of big data analytics to provide intelligence to the tax authority on eligible tax payers and their real taxable incomes and assets. As we plan to roll out the IPPIS to all other MDAs in 2019 and optimize Government Integrated Financial Management Information System (GIFMIS), we are set for an improved PFM system that ensures an efficient and cost effective public service delivery for our citizens.” In addition to the mapped out initiatives, the Value Added tax (VAT) expansion programme is also ongoing and “this programme is designed to ensure that we improve collection efficiency whilst ensuring there is automation of VAT collection at source in some key sectors. FIRS has already begun VAT automation programme for Banks and other large industries. The target at improving the VAT collection, which was N148.92 billion as against the budgeted figure of N207.51 billion in 2018, also considers seriously the digitalization and transformation initiatives which are an integral part of the whole revenue collection efforts.” The entire effort is based on the fact that independent revenues are a critical part of the revenue mix of Nigeria. Though there is not yet optimal performance of independent revenue, but the Honorable believes there has been some improvements. The independent revenue that was generated in 2018 was N454.34 billion, this is against a budgeted figure of N847.95 billion, representing 54% performance. In 2017, actual independent revenue performance was 25% of the target.   Source: independent

The European Union (EU) Support to Federal Government Reform Programme (EU-SUFEGOR) spent a whooping €20m on varieties of reforms to deepen good governance in Nigeria. The Team Leader of the EU-SUFEGOR, Prof. Olaseni Akintola-Bello, said this in Abuja at the formal winding off of the five-year project. According to him, the Treasury Single Account (TSA), Integrated Personnel and Payroll Information System (IPPIS) and Bank Verification Numbers (BVN) among other policies are positive developments the country must strengthen and consolidate with others policies and strategies. He said the project was mostly implemented with the Bureau of Public Service Reforms (BPSR), Ministry of Budget and National Planning (MBNP), Office of the Head of Civil Service of the Federation (OHoCSF), Federal Inland Revenue Service (FIRS) and National Bureau of Statistics (NBS) under varieties of sub-projects. On her part, the Head of Section -Economic Cooperation and Energy, EU, Ms. Nadia Cannata, said the project has achieved high-level policy meeting on effective policy monitoring and evaluation for the development of a policy framework checklist. “There is the development of the medium term sector strategy (MTSS) through the provision of trainers, analysis of sector wide approaches in Africa and production of a citizen’s guide to the budget,” Cannata said. She said there was also the training of over 300 public servants in ICT capacity building. On his part the Acting Director-General, Bureau of Public Service Reforms (BPSR), Mr. Dasuki Arabi, represented by Head, Internal Audit of the bureau, Mr. Fola Ibn Aliu, said part of the achievement of the project was the production of up to date Compendium of Public Service Reforms for easy references for policy makers, apart from trainings and capacity building for over 600 public service officials. “It has also financed the production of an on-line self-assessment tool which has been found useful for assessing the management and organizational performance of public agencies,” Arabi said.   Source: Daily trust