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Nigeria’s income tax among the lowest in the world – Adzape-Orubibi, BIRS boss

*Says Benue’s IGR growing steadily

BY PETER DURU, MAKURDI

Mrs. Mimi Adzape-Orubibi  was, about six months ago, appointed Executive Chairman of Benue Internal Revenue Service, BIRS. In this interview, she speaks about the innovation she introduced to boost tax collection in the state, her challenges and her resolve to ensure accountability, transparency and due process in the collection of taxe and the handling of government funds.

Since assumption of office, what have you been  doing differently to boost tax collection in Benue?

Firstly, on assumption of office, I introduced the use of the Point Of Sales, POS, in the collection of tax. Before now, people printed their own receipts and diverted the money that was  supposed to go into government coffers. But with the introduction of the POS, that issue has been addressed. We now have a data bank. We are also saving cost in the printing of receipts because the device has  in-built receipt. There is also transparency and accountability in the handling of government’s revenue. We now enjoy public confidence in what we are doing. The Ministries, Departments and Agencies, MDAs, of government are also not left out. They now use the POS. The policy exempts consultants or agents we engaged who have been given targets to meet  because they collect revenue and remit monthly to BIRS accounts.

The accounts they pay into are non-cheque accounts. Once money is paid in, it is automatically transferred into the Accountant General’s account. Nobody is permitted to handle cash anymore. Before now, the MDAs had numerous revenue accounts. What they were doing was that they would pay into such accounts and withdraw at will. But when I came in, in line with Section  6 of the Revenue Administrative Act of Benue State, which says we should close all the revenue accounts MDAs were operating which were not opened with authorization, I wrote banks and the MDAs to close such accounts in line with the provisions of the Act.The MDAs argued that they were operating the accounts  in order to have money to operate.

We however disagreed with them. We pointing out to them that they receive overheads for their operations and if what they were receiving was not enough they could write and inform government. I did not allow that because how can they generate money and spend  it at will. It will not allow us to have a comprehensive report of our revenue strength. All money is supposed to be revenue consolidated. So if they had continued with the old practice the Accountant General and I would not know what is actually coming in.

How did the MDAs take the new policy?

Mimi Adzape-Orubibi
Mimi Adzape-Orubibi

They resisted it and the matter went to the state House of Assembly which told them the position of the law and directed them to operate only with the BIRS accounts  in 23 banks. At  the end of the month, BIRS moves the  revenue to government’s accounts for disbursement. This has helped us to block leakages because, even as the Executive Chairman of BIRS, I do not have access to the accounts because they have no cheques. So after achieving that, my next move is to look inward. I discovered that my staff have not been trained for years. I want to train them in order to prepare them for the task ahead because we have been given a monthly target of N1.5billion by the governor and we are determined to achieve that.

The strategy i have adopted is to trickled down the target to each department. I was able to divide it among the offices and they are conscious of it. All the Area Tax Officers know it and they have been given targets and, if you don’t meet your target, somebody else will take over from you. And to ecourage us to work hard, the government has placed us on five percent of our Internally Generated Revenue, IGR, collection. You know what that means, the more collection we make, the better for us. Though the percentage is not enough, because today we have 74 units, 28 Area Offices and four zonal offices and we pay rent on these offices. BIRS owns the building of only four of these offices and they are situated where rent is  low. So we pay our rent from that percentage and also take care of several other issues and logistics. That is the more reason we must work very hard. We want to thank the governor because, before now, we were flat without that provision but he thought it wise to introduce it in order to help us meet our obligations.

How have you been able to convince the people to respond positively to tax payment?

Suffice it to state here that we have dedicated time to create awareness about our tax laws. We know that there is a missing link in that area because the people have been complaining about some taxes. In fact, when I came in about six months ago, I adopted the strategy of feeling the pulse of the people on some of our tax laws like the borehole and emission taxes and the feedback I got was a cry from the people. However for any amendment to be carried on such laws, we had to approach the House of Assembly in order to give the laws a human face. We are also looking at bringing in construction maintenance charges which will enable us collect rates from heavy duty trucks. In doing that, we will erect weighing devices to take the tonnage of the goods they carry. With that we will check the activities of hoodlums who stand on the roads with sticks harassing drivers of heavy duty trucks in the state. We are making a presentation to the Executive Council of the state with a view to making a law to that effect and, by so doing, ensure that the right amount is paid as tax by the truck   drivers who daily visit our markets to carry food stuff and other goods. In fact, we are also looking at collecting such taxe electronically to ensure transparency and accountability .

In which areas are you facing challenges?

We are having challenges with the MDAs who collect revenues but do not remit to the coffers of government. They do not have targets unlike the BIRS. So we have to collect, because we own all the revenue sources but the MDAs have to do their professional jobs while the BIRS does the collection at the point of payment. That is where we have issues. My staff work with targets unlike what you have at the MDAs. My consultants also work with targets. If they fail, we will take steps to recover the money in line with our contractual agreement. But I cannot do that to the MDAs if they fail to bring money. They are not under pressure to deliver but I am. My mindset is my target while their mindset is to collect salaries at the end of the month whether they deliver or not and nobody queries them. So of late there hasn’t been a good relationship between them and us because they see us as people who have come to take their jobs. They claim that one is working and another is chopping.

I told them no, nobody is chopping, the money goes into government coffers for the payment of salaries and the provision of necessary infrastructure for the good of all. The contention got to a point that I was summoned by the House of Assembly but, after presenting my case, the House saw reason with me. We are all working for the same government.They are now claiming that BIRS has incapacitated them, that they cannot work because we are collecting all the money. Yes we are. They get overheads which is for them to use. My major concern is that revenue collection must follow due process and eventually get back to where it should be-the Accountant General for onward distribution. That was my major challenge but I believe we have understood each other on that matter now.

Another of our challenge is funding in the face of scarce resource, but the governor is doing his best because the wage bill of the state is so high   and the allocation that comes to the state is so meagre and unable to meet the wage bill. Yet the governor is doing his best in that regard. Maybe we may still do another biometrics to ascertain the astronomical wage bill. On our part, we are witnessing a steady growth in our collections.

There is this contention that tax rates in Benue are higher when compared to other states; a particular case  is the vehicular license. Why the disparity?

It’s not true, our rates, like in other states of the federation, are Joint Tax Board, JTB, approved. We cannot for any reason collect anything above the JTB approved rates. We have all our rates openly displayed in our offices for every prospective tax payer to see. From records we are doing far better than our neighboring states and several others. When people claim that some persons run to neigbouring states to have their licenses renewed, I tell them it’s not true, the reverse is the case because, from  records, we are doing better than those states and this is because we enjoy more patronage given the transparent manner such issues are handled in Benue.

On the issue of tax clearance, the rule is that individuals are supposed to file their income statement indicating their earnings from January to December. I’ve gone out severally to tell  people that they are supposed to file in their tax returns between January and March, that is the deadline. But if you do it from April, the law says you pay N50,000 penalty as an individual because you are filing late while an enterprise pays N500,000. I want to also state that we are currently publishing a local news magazine which we distribute for free wherein we take time to enlighten the people on different taxes and the rates they are to pay and at what given time. We also include the hotlines of those we engage as consultants and agents and every other thing that the public should know so that they are not cheated by anyone or even our agents.

So when you have not filed as stipulated by law, we apply best of judgement in arriving at your tax. There are rates in percentages that apply to your incomes depending on the amount involved. Now, it will surprise you to know that Nigeria’s Pay As You Earn, PAYE, rate is the least when compared to other countries. We deliberated on that at our last JTB meeting in Kano. Even with that,   people are still complaining. The fact is that if you don’t file your returns, we assess you on our own based on best of judgment as provided by law.

The onus rests on you to declare you income to enable us prepared, your tax clearance. Even when you declare, we still write to our bankers to alert them before it is processed and given to you. It is not something you get off the shelf. So what I’m saying in essence is that when we apply the best of judgement to arrive at the payable tax, we do it without recourse to your income; so it’s discretional and you have no reason to complain. But if things must be done rightly, you should tell us how much you earned and in case you do not have income so to speak, we assume that you earned one hundred thousand Naira for three years so as to enable us raise a clearance for you. But the fact is that people always complain when it comes to taxation. So what we do is to apply ourselves to the provisions of the law so as to be properly guided and be able to defend yourself at every given time.

There is the issue of people who reside and work with corporates organization in the state but are not able to get their tax clearance because their tax deductions are made at their head offices. How can that issue be addressed?

The right thing is that such organizations ought to deduct the taxes and remit same to the tax board where the employee is resident so as to qualify him for tax clearance in that state. If that is not done, I’m afraid the affected persons may be compelled to pay another tax in his state of residence to qualify for the issuance of a tax clearance certificate in that state.


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