Multiple Tax Collectors, Defaulters And Auditors

By Casmir Igbokwe

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.

Many Nigerians have resigned themselves to fate. To them, what matters most now is an improvement in their standard of living. They expect the government to initiate a review of the Taxes and Levies Act. This is to eliminate ambiguities and streamline the administration and collection of taxes by the different tiers of government.

Government may also consider consolidating some of these taxes to lessen the burden on individuals and corporate bodies. The re-enacted Lagos Land Use Charge Law (2018), for instance, is a consolidation of ground rent, tenement rate and neighbourhood improvement levy.

Undoubtedly, a good tax system would not only encourage savings and generate employment opportunities. It would also create an opportunity for tax collectors to escape the Zacchaeus treatment.

 

Re: Isuofia: New yam, spirit beings and other stories

You are correct Casmir. Some Igbo don’t know the difference between culture and paganism. We have lost our identity; that is why we are plagued from all corners, and religious bigotry is having a field day. My brother, keep educating Igbo on why we should internalise our culture and tradition, because it is our heritage and identity.

– Smart, Abakaliki, +2348160638941

We need to develop our cultural heritage to boost our tourism internationally.  New yam celebration in South East can boost local and state revenue, if it is well organised.

– Gordon Chika Nnorom, Umukabia, +2348062887535

Re: What a country!

It’s very disturbing that Nigeria has remained a country persistently founded on a designed platform of the fraud of the oligarchs, by the oligarchs and for the benefit of the oligarchs who are in control of the security agencies, which they use at will to mow down all oppositional voices. Nigeria needs very serious constitutional amendments and restructuring of our mindset, with emphasis on suppressing tribalism and religion to an insignificant level. The leadership of the judiciary and legislature in Nigeria, just like the executive, must be allowed to enjoy constitutional immunity. If Onnoghen must go, let the law rule, not the rule of a corrupt process masterminded by interested parties. Our criminal jurisprudence is not accusatorial where one is pronounced guilty before prosecution: it is prosecutorial and anchored on presumption of innocence. Hack writers and emergency lawyers who either out of sycophancy or brazen display of their political direction have created a system of an all-knowing executive that does no wrong.

The peculiarity of Nigeria should also attract peculiar applications to our political problems. Or haven’t we observed with grave consternation the questionable and laughable decisions being churned out by our powerless and jittery courts and ‘yes sir’ legislature? Recently, Governor Nasir el-Rufai, usually in the news for divisive submissions, proposed the abrogation of zoning, citing the need for competence, as if that was the yardstick for his people’s recurring ascendancy to presidential power. His Excellency is aware that his proposal is a huge fraud. Have we had a Nigerian President of Igbo descent 49 years after the war?

Why shut the door of Nigeria’s presidency against a particular race through idiotic and annoying reasoning? The Igbo race must sit up and shun this Vee-Pee Syndrome, pick out the best from their lot, stand behind him or her, while reaching out to other sectors of the country and present that Nigerian President of Igbo descent to Nigerians for 2023 presidency.

Lastly, let me warn that the various ethnic settings in Nigeria must play the Nigerian card wisely, objectively, inclusively and respectfully, otherwise, we may soon wake one day and behold a scattered Nigeria in many identifiable and internationally-approved entities.

– Edet Essien Esq., Calabar South, +2348037952470

  • First published in the Daily Sun of Monday, August 26, 2019.

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