The people of Jericho held Zacchaeus, the corrupt chief tax collector, in low esteem. The biblical story had it that when Jesus was passing through Jericho, the very short Zacchaeus had to climb a tree to catch a glimpse of him. People grumbled and looked at him with scorn. If they had their way, they would have pulled him down from that tree.
Many Nigerians still see Zacchaeus in our modern-day tax collectors. Be they agents of the Federal Inland Revenue Service (FIRS), state Inland Revenue Service or even local government thugs, these tax collectors have a way of harassing corporate and private individuals over tax issues. Last week, for instance, the FIRS released a list of 19,901 companies that allegedly defaulted in tax payment. Some of the defaulters include Obasanjo Farms, owned by former President Olusegun Obasanjo; Davido Music Worldwide Ltd, owned by popular musician, David Adeleke; God is Good Motors; Slot Enterprises; and popular supermarket chain, Addide. The FIRS placed the accounts of these companies under lien. It threatened that, should they fail, refuse or neglect to pay the tax due within 30 days of the notice, it would proceed and enforce the payment against all the directors, managers, secretaries and every other person concerned in the management of the companies. For many of these companies, part of the problem is that they are confronted with up to 50 different taxes and levies in Nigeria. The Federal Government collects such taxes as companies’ income tax, education tax, and value added tax. States collect such taxes and levies as personal income tax, withholding tax (individuals only), capital gains tax (individuals only), and stamp duties on instruments executed by individuals. There are also pools betting and lotteries, gaming and casino taxes, road taxes, business premises registration fees in respect of urban and rural areas, land use charge, consumption tax (hotels, restaurants and event centres) and many others. The local governments, on their part, collect such taxes and levies as tenement rate, right of occupancy, market taxes and levies, merriment and road closure levy, marriage, birth and death registration fees and many others. Multiple taxes have crippled operations of a lot of companies in Nigeria. In some cases, tax collectors reportedly compel companies that recorded losses to pay taxes from their turnover. Besides, the high rate of withholding tax charged on dividends reportedly scares many companies from listing their shares on the stock exchange. Fewer than 200 companies are listed on the Nigerian Stock Exchange, whereas the country can boast of over 2,000 registered public companies. Little wonder Nigeria ranks low on the world ease of doing business index. No doubt, tax is a good source of revenue for government. Hence, some people saddled with the responsibility of collecting it, like the executive chairman of the FIRS, Mr. Babatunde Fowler, will not agree that there is anything like multiple taxes in Nigeria. They think more on how to generate better income from taxation and less on accountability and proper utilisation of the tax proceeds. That is why the recent action of the Chief of Staff to the President, Abba Kyari, is commendable. Kyari queried Fowler over alleged discrepancies in tax collections from 2015 to 2018. In 2015, for instance, the budgeted target was N4.5 trillion, while the actual amount collected was N3.7 trillion. In 2016, the actual collection was N3.307 trillion, whereas what was budgeted was N4.95 trillion. In 2017 and 2018, the FIRS collected N4.027 trillion and N5.32 trillion, respectively. However, the budgeted targets for the two years were N4.89 trillion and N6.7 trillion, respectively. Kyari’s query raised suspicions in some quarters. The opposition Peoples Democratic Party, for instance, urged the National Assembly “to come to the rescue by holding a public inquest into the handling of taxes collected by the FIRS in the last four years, take urgent steps to recover the stolen funds and channel such to projects that have direct bearing on the welfare of Nigerians.” To clarify issues, the Presidency quickly issued a statement. Fowler, it said, was not under any probe. The letter from Kyari, it explained, merely raised concerns over the negative run of the tax revenue collection in recent times. Nevertheless, the Federal Government announced plans to audit FIRS and Customs’ revenues. These two agencies are money-spinners. Perhaps, the government suspects that to whom much is given, much could also be stolen. In Abuja, Lagos and some other places, people talk in hushed tones about how money realised from taxes is allegedly diverted. It is expected that the Office of the Auditor-General of the Federation, which will likely conduct this audit, will do a good job of it. My only fear is that nothing much would come out of it. Recently, the Auditor-General of the Federation (AuGF), Anthony Ayine, indicted many government agencies for not submitting their audited accounts to his office. Ayine also accused the Nigerian National Petroleum Corporation (NNPC) and Solid Minerals Ministry of poor/non-disclosure of receipts. In an audit report, the AuGF said, as at April 2018, 109 agencies had not submitted beyond 2013; 76 agencies last submitted for the 2010 financial year, while 65 agencies have never submitted any account since inception. Besides, the AuGF reported errors in the amounts included as the Federal Government’s share of VAT for 2016. The sum of N108,997,999,612.48 was recorded as Federal Government’s share of VAT without the full picture of the VAT earnings to the federation. From the auditor’s account, what was due the Federal Government from January to December 2016 was N116,783,571,013.35. This posted a difference of N7,785,571,400.87. The Accountant-General of the Federation could not provide explanations for this difference at the time of the audit report. Despite concerns raised by the AuGF, nothing much was done to sanction defaulting agencies and parastatals.
Source: Sun News
