Nami’s Magic Wand: Restructuring Revenue Collection in Nigeria
By Abdullahi Haruna
Revenue generation is very critical to the survival of a country or otherwise all over the world. It is non-debatable that most poor countries of the world are poor because they have a problem of revenue.
To fix the problem of revenue generation in most developing and emerging markets, the national and sub-national governments of such countries pay more than a passing interest in the operations and management of the countries’ internal or inland revenue bureaus/services/boards which supervise revenue collection, aside from placing other programmes and policies to shore up their revenue base.
In Nigeria, the Federal Inland Revenue Service(FIRS) is the body statutorily saddled with the responsibility of managing the nation’s revenue collection. Established in 1943, the service became autonomous via the passing of the FIRS (Establishment) Act 13 of 2007. The core functions of the service are to assess, collect, remit, and account for the federation’s taxes and revenues.
Over the years, the FIRS has undergone several transformations under various leadership and management. However, its phase between 2020 and 2022 has been of striking relevance and importance given the declarations of unprecedented revenue collected on behalf of the federal government by the service.
According to multiple industry experts familiar with the issues, the turnaround in the revenue collection credential of the service is substantially due to the efforts of the leadership headed by Muhammad Nami, its Executive Chairman.
It did not, therefore, come as a surprise to a lot of people when the Federal Inland Revenue Service (FIRS) announced on Monday that it collected over N10 trillion in tax revenue in the year 2022, the highest tax collection ever recorded in its history. The Service declared this in its “FIRS 2022 Performance Update,” report signed by its Executive Chairman, Mr Nami, after his briefing with President Muhammadu Buhari.
It is the first time the FIRS would cross the 10-trillion Naira mark in tax revenue collection after several decades of existence. And that’s a milestone in a struggling economy like Nigeria’s. In the Performance Update made known to the public, the service said it collected a total of N10.1 trillion in both oil (N4.09 trillion) and non-oil (N5.96 trillion) revenues as against a target of N10.44 trillion in 2022.
The report further noted that Companies’ Income Tax contributed N2.83 trillion; Value Added Tax N2.51 trillion; Electronic Money Transfer Levy N125.67 billion and Earmarked Taxes N353.69 billion while non-oil taxes contributed 59% of the total collection in the year, oil tax collection stood at 41% of the total collection. One interesting takeaway from this is that the non-oil sector is beginning to live up to expectations especially now that there are so many uncertainties in the global oil market.
The Performance Update Report further clarified that included in the total revenue sum is the sum of N146.27 billion which is the total value of certificates issued by the Service to private investors and NNPC for road infrastructure under the Road Infrastructure Development Refurbishment Investment Tax Credit Scheme created by Executive Order No. 007 of 2019.
The report also stated that the N10.1 trillion is exclusive of tax waived on account of various tax incentives granted under the respective laws, which amounted to N1,805,040,163,008.
HOW THE FEAT WAS ACHIEVED
Like the saying that nothing good comes easy, finance specialists, especially in the public sector, say the FIRS could not have achieved the feat without putting in place some reforms and mechanisms to actualise the feat. Essentially, the deployment of technology through the instrumentality of the automation of the service’s administrative and operational processes in tax collection played a crucial role in the massive turnover.
True to the experts’ assertion, while providing perspective to the unprecedented tax collection, the service noted in the performance report that the Muhammad Nami-led management upon assumption of office came up with a four-point focus, namely: administrative and operational restructuring; making the service customer-focused; creating a data-centric institution; and improving its stakeholder relations. It further noted that throughout 2020 to 2022, the management had introduced reforms bordering around these four-point focuses which were producing results.
“The reforms introduced at different times from 2020 are gradually yielding fruits. By the close of 2022, the Service had fully restructured the administration of the Service for maximum efficiency and achieved internal cohesion such that all functional units are working in unison towards the achievement of set goals.
“As a result of a conducive environment created for staff, officers of the Service are pulling their weight on the global stage with international recognitions and awards;
“The Service had also automated most of the administrative and operational processes. A major leap was the full deployment of the TaxPro Max for end-to-end administration of taxes in June 2021. The module for the automated TCC went live 1st January 2023 while taxpayers had already downloaded over 1,000 TCCs this year without having to visit FIRS office,” the report read.
The report also noted that the Service had operationalised its data mining and analysis system thereby allowing for data-backed taxpayer profiling. This is particularly good as taxpayers’ metrics and analytics will always assist the Service to know what it’s getting from each and every tax-paying entity based on credible data gathering and assessment.
Other reforms the Service introduced in the period under review focused on the detoxification of the tax environment by ridding it of mutual mistrust, negative tax morale, and tax evasion, through effective taxpayer education, open engagement with stakeholders, and improved services. It noted that it is courtesy of these reforms, framed around the four-focal points that the Service was able to achieve the collection.
The man of the moment, Mr Nami, while commenting on the N10.1 trillion record tax collection achieved under his leadership, stated that it was made possible through “dogged implementation of strategic reforms over the past two years; a renewed commitment by officers of the Service, accompanied with a boosted morale; as well as the innovative deployment of technology for automation of both tax administration and operational processes.
“This collection was possible through collaboration with our stakeholders, from our colleagues at the Executive branch of government to the members of the judiciary, to our brothers and sisters at the National Assembly, as well as the tax advisory committee, professional bodies, unions, and most crucially our taxpayers.”
AND THIS IS NOT THE FIRST TIME
2022 is not the first year the FIRS made a giant leap in revenue collection. In fact, 2022 is the second consecutive year that the Service will be recording unprecedented tax collection. In 2021, the Service achieved a record tax collection of N6.405 trillion, over a hundred percent of its collection target for the year, as well as the first time that the Service will cross the 6–trillion mark.
In 2022, building on the success of the preceding year, the Service achieved a record collection of N10.1 trillion, being over 96% of its collection target for the year, and the first time the Service will cross the 10–trillion mark. This collection represents an over one hundred percent leap from the tax collected by the Service in 2020—the first year of the current management of the Service.
PROJECTIONS FOR 2023
As for 2023, Mr Nami stated that the Service would build on the current reforms, achieve full automation and continue to establish a resilient Service that would continue to provide sustainable tax revenue to fund the government.
The government truly needs all it can to generate revenue this year and borrow less because of the burgeoning debt profile of the country, which has become a source of worrying concern to Nigerians. There’s no whiff of doubt that the FIRS will double down on revenue collection to help the government meet its revenue target. “We intend to maintain, and even improve on the momentum in 2023,” Mr Nami stated.
“We have peaked, but this is not certainly our peak. In fact, my hope is that this would be the least sum the Service would ever collect going forward. Our goal is to identify more areas where we can improve on, in the delivery and efficiency of our collection; and plug loopholes, while deploying innovative reforms in data and artificial intelligence.
“Ultimately, we believe that the FIRS can shoulder the responsibility of providing revenue needed for the governments across the Federation to cater for the needs of the Nigerian people through taxes.
“This is feasible once we get the much-desired support from the three tiers and arms of government, as well as all stakeholders.”
Perhaps the greatest challenge the FIRS may face in its quest to rake in more revenue for the government in 2023 will be a seeming lack of cooperation from taxpayers who are facing existential threats from galloping inflation, insecurity, increasing lending rates and the rising cost of power, among others.
The perceived absence of transparency and lack of accountability in the management of the country’s revenue is also a snag. Although FIRS is not to blame for this, the taxpayers’ understanding is that it is the body that collects the taxes for the country. Going forward, the government has to be more accountable to the people and deploy the revenue judiciously to fund critical infrastructures, improve the standard of living of Nigerians, provide jobs, create access to quality healthcare, e.t.c.
Of course, FIRS also needs to block more leakages in its operations and loopholes which could be leveraged by unscrupulous staff and taxpayers to game the system and thus criminally divert what should accrue into the Service’s purse into their personal accounts or that of their allies. This is where technology, as hinted by the Executive Chairman, will help minimise waste and potential for fraud to the bare minimum.
The FIRS’s feat in the 10.1 trillion Naira tax collection did not come alone via the Service’s solo efforts. It received multispectral collaboration and support from the political leadership of the country.
In the performance update report, FIRS appreciated President Muhammadu Buhari for his support, as well as the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, the Minister of State, Mr Clem Agba, and the National Assembly.
Importantly, the service commended all patriotic taxpayers who paid their taxes correctly, stakeholders for their support, and officers of the Service for their dedication to duty.
“Nigeria College of Taxation and Fiscal Studies” Bill Passes Second Reading
A bill for an Act to establish the Nigeria College of Taxation and Fiscal Studies passed its Second Reading last week at the Senate.
The presentation of the Bill was made by Senator Abdullahi Aliyu Sabi CON on the floor of the Senate Tuesday last week, where he noted that the institution, if established would provide professional and academic training as well as certification for tax administrators, tax practitioners and tax professionals across the country.
In his presentation, Senator Sabi, who represents Niger North Senatorial District of Niger State stated that the College had become necessary given the important role that taxation is playing in the nation’s economy, and that this institution would help formulate and draft tax policy for the country while addressing human capital gaps in the country’s tax industry.
“It is becoming increasingly clear that diversifying the sources of government revenue to focus on sustainable sources is inevitable. This diversification puts taxation at the centre of the revenue mobilization discussion; the attainment of this laudable objective would require tax experts who have been properly and adequately schooled to formulate tax policy, draft and interpret tax legislation, carry on private tax practice, and administer taxation in the modern era.
“In view of the constant shift in the social, technological and business environment, with direct impact on the tax system, it is is important to have skills, competence, and adaptable personnel to man the tax system. There must be a conscious development of the field of taxation and fiscal policies in Nigeria to awake the society on the importance of taxation as a sine qua non to our development.
“Nigeria must go beyond the mere inclusion of taxation in the curriculum of educational institutions; instead the country must establish a modern system that facilitates the study of taxation via a well laid out academic curriculum, guided and focused by practical realities of Nigerian taxation and the revenue ecosystem,” he noted.
Senator Sabi further emphasised that the College would help in tackling the issue of lack of sufficient capacity of tax officers, which he noted has led to “the delegation of powers of revenue authorities to third parties, creating complications, multiplicity and uncertainty in the tax system,” and that it would correct “aggressive and orthodox methods for tax collection” while also carrying out a “regular review of obsolete tax laws that do not reflect modern realities.”
He noted that all these would help the country address its fiscal and revenue challenges and achieve the objectives of the National Tax Policy.
In his presentation, the distinguished Senator representing Niger North also cited that countries such as Kenya, Japan, India, Australia, Austria, Singapore, and Malaysia have established similar institutions for developing capacity in taxation, excise duty and customs and fiscal matters, and that this has impacted positively on their economy through significantly high tax-to-GDP ratios.
This College is expected to provide training for tax officials, including officers of the Federal Inland Revenue Service (FIRS), Nigeria Customs, sub-national revenue authorities, and even the general public. It is to consist of a main campus and 12 regional centres.
The Bill proposes that the College would be funded chiefly by the extant yearly subvention of the FIRS for training thus requiring no direct impact on government spending.
- Senator Adamu Aliero representing Kebbi Central District, Kebbi State, commenting on the Bill noted that the only sustainable source of revenue for the Federation was taxation, and that the proposed College would train tax officials who would be instrumental to widening the country’s tax net.
He also added that there is currently no institution in Nigeria that offers specialised training in taxation.
THE REAL CHALLENGE FOR INEC IN ADAMAWA STATE
By Ahmad Sajoh
The gubernatorial candidate of APC in Adamawa State is throwing a challenge to INEC. Review the election held in Adamawa state in 16 Local Government Areas or in it’s entirety if you so wish. We are ready for it. Every vote cast for Senator Aishatu Dahiru Ahmed Binani is a legitimate vote. Review the results, conduct forensic verification, do whatever you can to authenticate the results. You can only arrive at one conclusion. The votes scored by and recorded for Senator Binani are legit. But the other side cannot make the same claims. They do not have the courage or the audacity to ask for a review even in places they lost. Let a review be conducted and the manufactured figures recorded for PDP will fall like a park of cards. They are not legitimate votes. They are mostly ghost figures allocated by dubious officials mostly after our agents have signed the correct results.
There are a number of key areas we are challenging the figures cooked up for the incumbent PDP Governor and in all we have concrete proof that the votes purportedly allocated were not legitimate. We are not afraid of such verification catching us in any way. Let it be done whole sale in those we have identified. Let the review process affect whoever is concerned, if it doesn’t favour us so be it. Let the PDP come out openly and accept that a review be conducted in all those identifies areas we have listed in this write up. Clutching onto lies about the fracas in just one Local Government such as Fufore is not enough. We are challenging the legitimacy of the votes purportedly cast and recorded in 16 of the 21 LGAs. Let them accept the challenge and ask for a review as well.
The first and most important of the reviews required is the use of BVAS machines for accreditation of voters. In most of the Local Government Areas were bogus results are posted the BVAS machines were completely ignored. Voters were simply ferried from one location to another and made to queue and vote without any reference to the BVAS machine. We challenge INEC to compare the results posted with the BVAS accreditation reports. We are willing to concede if the two tally. If accreditation by BVAS is the basis for legitimizing the March 18th elections, then the exercise is totally illegitimate in most places in Adamawa State. We make bold to say the BVAS machines only went a tourism trip to many places in the state. They were not instruments for conducting legitimate elections. They were not used in most places.
Secondly there are multiple alterations on result sheets in many places. In most of the areas where outrageous results are posted, the result sheets bear glaring alterations often signed by someone other than our agents. Those alterations are often conducted in some backwater locations far from the polling areas. They simply connive with highly compromised officials including security personnel to change figures before taking them to collation centers. In fact they did it without any creativity or fear of God. For a figure 24 for example, they simply added a 2 before or a 4 after. Thus for them 24 could either be 224 or 244. It was so obvious that in some instances they forgot to change the over all total or the amount in words until at the collation center when further cancellations take place. We have many of such altered result sheets in our possession presently.
Thirdly they are to have ordered officials to write reports for polling units where no elections took place at all. This is the most annoying of all the fraud perpetrated. In many locations with serious security challenges the people had relocated long ago due to the activities of Boko Haram, yet INEC maintains a record of polling units located there. Such places had voters and are deserted. But elections were purported to have been held there. Humongous results of people voting was recorded without any proof of even INEC staff visiting the places. These are scandalous occurrences which need to be properly reviewed.
Another form of fraud peretrsted was result swapping. We have it on record that in many places results were swapped with APC results being recorded for PDP and the zero votes of PDP recorded for APC. These results being swapped and changes made to the originals is rampant and in favour of PDP. Sometimes all votes cast were simply recorded for PDP and something insignificant allocated to the APC that was the original winner in that polling unit.
One of the most worrisome of the fraud perpetrated is the changes made to figures at the collation center. Almost all totals at the collation centers are at variance with the totals obtained at the polling units. On several occasions we drew the attention of INEC but it appeared they are not interested in ensuring that the process is free, fair and credible. Now we are calling for a review. For the sake of the credibility of the process and the legitimacy of the outcome, we need a review please.
Perhaps it will be necessary to point at two other lapses that had seriously questioned the legitimacy of the election. One is vote buying and the other is voter intimidation using hired thugs. The security agencies either deliberately ignored such glaring cases of vote buying or that the cases were so rampant that there was no need objecting to them. We have pictures and videos of PDP operatives sharing materials and money in the presence of security agencies and other citizens right at the polling booths.
As for voter intimidation, the original plan was to scare away women from polling units. But when they realized that even men were afraid they sent all away including our agents. Getting such free space they committed many other atrocities including ballot box staffing and multiple thumb printing. There is a particular polling unit in Madagali where a relation of one of the gubernatorial candidates openly and forcefully took away the governorship box and went home to stuff it before bringing it back.
Part of the review we want is to also look at the serial numbers of the ballot papers. Since the ballot papers were allocated to locations in batches it is quite obvious that anyone of a different serial number may be brought there from other locations. How did they get there? Simply put we want a review and not to have all those anomalies swept under the carpet. Senator Aishatu Dahiru Ahmed Binani wants to win this election legitimately. She is not asking INEC to favour her. She wants to win or loose on account of legitimate votes not through dubious manipulation of the process and the allocation of unearned votes allocated by dubious officials. All we are asking for is that INEC should conduct a review based on the provisions of the electoral act. And whatever is discovered to have been done right we shall stand by it. However where glaring anomalies exist expunge them as required by law no matter who is affected by the existence of such anomaly. It is all we ask for, and it is within the ambit of the law. That is certainly not too much to ask.
Tax Administrators Must Match The Pace Of Global Technological Advancements — CATA President
Tax administrators must keep up with the dynamics occasioned by disruptive new technologies of the 21st century, and arm themselves with the necessary skills, capacity and character for effective and efficient tax administration in the fourth industrial revolution age.
This was the position expressed by the President of the Commonwealth Association of Tax Administrators (CATA), and Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami in his charge to the 2022 CATA Senior Leadership cohort, during the closing ceremony of the programme held at His Majesty’s Treasury Headquarters, London, United Kingdom, on Friday.
Mr. Nami, in his remarks, highlighted that due to technological advancements in actualising human needs, fulfilling social interactions and conducting commercial activities, the way and manner of tax administration is constantly changing. He thus called for tax administrators to keep up with the times by improving on their skills and competence in line with these changes.
“The global tax arena is continually changing,” he noted. “The growing reliance on technology for much of basic human needs, social interactions and business dealings means that the tax-turf remains in a state of constant flux.
“The taxman is only able to match the depth and pace of the changes if equipped with relevant, adequate and up-to-date skills.”
The CATA President praised the Commonwealth association for its investments and contributions through its Senior Leadership Programme, which he noted has helped bridge the capacity gaps of tax officials in member countries.
“I am glad to note that CATA has, over the years, continued to organise the Senior Leadership Programme in order to meet the capacity development needs of tax officials in commonwealth countries. It has become a tradition for CATA to provide participants at this programme with top-notch tuition using case studies in a fun-filled environment.
“The 2022 edition did not depart from this tradition. The classes, according to reports, were very interactive all through the various sessions whether at home, in India or in the UK.
“Without doubt, the capacity of participants to lead themselves, to lead others, and to lead their functional units have been greatly enhanced.”
Quoting the renowned African philosophy of Ubuntu, “I am, because we are,” Mr. Nami urged the twenty (20) participants drawn from senior tax officials in commonwealth countries to put the knowledge and skills they have acquired during the programme into good use for the benefit of their countries, while further calling on the cohort to maintain and sustain the network of colleagues they have met during the programme.
The CATA Senior Leadership Programme is a yearly senior-level Leadership Programme delivered by His Majesty’s Revenue and Customs (HMRC) on behalf of the Commonwealth Association of Tax Administrators. It pools together senior leaders of tax authorities in Commonwealth countries to equip them with the requisite leadership skills to navigate their organisations in a dynamic and complex landscape. The programme recognises the importance of good leadership to result-driven tax administration in the 21st century.
The 2022 edition combined residencies in India and the UK, accompanied with virtual sessions, and work within the domestic tax authorities of participants.
Johannes Oluwatobi Wojuola
Special Assistant to the Executive Chairman, FIRS (President, CATA)
(Media & Communication)
March 20, 2023
- “Nigeria College of Taxation and Fiscal Studies” Bill Passes Second Reading
- Opinion: BINANI,HOW THE DESIRE AND POWER OF A WOMAN BECKONS BLOODBATH IN ADAMAWA
- Matashin da aka yi yunƙurin cire wa ƙoda domin bai wa ƴar Ekweremadu
- THE REAL CHALLENGE FOR INEC IN ADAMAWA STATE
- DAN JARMA ADAMAWA MUSTAPHA VISITS KWANKWASO, ABBA, SOLICITS FOR REINSTATEMENT OF LAMIDO SUNUSI AS EMIR OF KANO