BY CHINWEOKE AKOMA
Generally, there are three major indicators of an efficient tax system – number of tax payments, time required to comply with tax obligations and total tax.
In Delta State, factors which had hindered the achievement of a well organised system of taxation included multiplicity of taxes before July 2009, inadequate use of technology in tax collection and a defective tax dispute resolution process.
Among several other reasons adduced for the cumbersome nature of tax administration in the state were: lack of transparency and accounting, collection of taxes by touts and lack of tax awareness.
It was to eradicate the aforementioned challenges and to sanitise the revenue collection process in the state that the Delta State Board of Internal Revenue (DBIR), led by Hon Joel-Onowakpo Thomas, started a process of involving experienced tax professionals and accountants in the administration of taxes.
The collaboration between the professionals in the state ,under the auspices of the Tax Audit Monitoring Agency (TAMA), and the Board of Internal Revenue, is generating huge results as reflected in the tax collections in the past two years.
TAMA ,which comprises bodies/groups of tested professionals, tax practitioners and accountants, skilled in tax management and administration, was instituted by DBIR in May 2011 with the sole objective of bringing professionalism and expertise to bear in relating with all companies in Delta State, improve on the state IGR and expand on DBIR tax net.
TAMA was also saddled with the responsibility of monitoring, auditing and investigating companies operating in Delta state shore to enable the attainment of the actual tax due (i.e PAYE & WHT) and payable to the state Government.
In carrying out its responsibility, the tax professionals largely employed moral-suasion to convince its various clients on the reasons they should comply with the tax laws in the state rather than being compelled to do so.
Having created the conducive environment for operation, members of TAMA have been liaising with their clients to ensure full disclosure of employees, adequate/actual PAYE deductions, full disclosure of all contractors’ details and adequate/actual deductions of WHT.
The understanding among the Board, the tax professionals and clients has further helped in ensuring full disclosure of expatriate employees, provision of actual expatriate quota and monthly immigration returns, provision of expatriate deletion where applicable and prompt remittance of monthly PAYE and WHT to the bank.
Collection of DBIR receipts from local tax offices and provision of copies of monthly PAYE and WHT receipts to TAMA for record purpose has also become routine. At the end of each calendar year, TAMA carries out end of year tax audit of its clients.
Because of the collaboration between the tax professionals and the tax board, tax compliance has increased as most clients have paid up all their tax liabilities to DBIR.
TAMA also liaises between its clients and DBIR at the instance of its clients and thus enhances tax compliance by providing relevant DBIR tax details to enable the creation of a better and robust tax template for their use, expansion of tax net: sourcing of clients to increase DBIR tax clientele base and creation of client education/awareness to help them embrace DBIR.
However, in order to take the ‘’Delta Beyond Oil” policy to the next level, there is the need to create further tax awareness and enlightenment of the informal sector to further get more tax paying public into the tax net of the state.
The success of the relationship between the tax professionals and DBIR has also been attested to by the Executive Chairman of the Board, Thomas, who said the revenue agency had engaged the services of tax professionals to work on behalf of the state government in the reforms.
He told some World Bank functionaries that the consultants were going through the books of the different companies in a cordial atmosphere with their officials, and come up with the relevant taxes to be paid, based on the laws of the state.
‘’In the past, multiple notices were issued in respect of taxes but the new partnership between the board and the companies is meant to address such matters. The agency is committed to ensuring efficient tax generation that would lead to increased for the state,” he said.
According to him, measures put in place were already yielding results and had led to “the remarkable increase in the state’s IGR from N1.2 billion when the Board was inaugurated in July 2009 to N5.7 billion recorded in January this year.”
He noted that the Board’s relationship with the tax gurus had led to the blocking of all the leakages in the tax system . “Before 2009, the dependence on oil in the state was 90 per cent and what that meant was that if for instance there was a drop or fluctuation in oil price, it will affect everything in the state including the payment of salaries”, he added.
Tax professionals, at a recently held meeting in Warri, unanimously agreed that by empowering them through engagement as consultants to work with the state Board of Internal Revenue in the areas of tax audit and investigations to recover arrears of taxes, the state government has also succeeded in putting the collection of taxes on the path of sanity.
They added that with their inclusion in the collection of taxes, the government has also succeeded in creating employment for young tax consultants now working as employees under them.
However, the concept of ‘’Delta Beyond Oil” by Governor Emmanuel Uduaghan was conceived as an alternative to oil receipts while focusing attention mainly on IGR .
Other such strategies adopted by the state government to empower the citizens so as to achieve the vision of ‘’Delta Beyond Oil” include the provision of schemes aimed at supporting the micro, small and medium scale enterprises.
Besides, the state government is providing basic infrastructural facilities to assist the private sector operators to grow their businesses and thereby increase job opportunities for youths in the state.
There has also been tremendous progress and improvement in security situation in Delta State through the commissioning of the Delta State Waterways Security Committee.
The empowerment of the Delta State Oil Producing Areas Development Commission (DESOPADEC), to address issues of under-development and creation of jobs in the oil producing communities of Delta State with the much needed basic facilities in the host communities, is also making positive impact.