Muritala Awodun: How we mobilise revenue for Kwara development

Muritala Awodun: How we mobilise revenue for Kwara development

Friday, December 25, 2015 1:00 pm

Dr. Muritala Awodun

Dr. Muritala Awodun

Dr. Muritala Awodun is the Executive Chairman of the Kwara State Internal Revenue Service. In this interview with our correspondent, Stephen Olufemi Oni, he bared his mind on plans by the newly reconstituted Revenue Service to generate sufficient funds for strategic development of the state

Q: As the Chairman of the State Revenue Service, can you shed morel ight on the activities of your new establishment?

A: Kwara State Internal Revenue Service was established by law, the Revenue Administrative Law which was signed into law on 22 June, 2015, to be the sole agency to collect revenue on behalf of the Kwara State Government. By that law, the Board of Internal Revenue that used to exist became defunct and ceased to exist while the Kwara State Internal Revenue Service took over from there as the sole revenue collecting agency. So in essence, from June 2015 to this moment the operation of the State Revenue Service commenced through the recruitment of staff, provision of infrastructure, buildings, facilities with which to work such as computers and other electronic / information technology devices as well as the redesigning of the collection processes. So all these preoccupied the service in the last five months, though I joined them two months ago. The first three months were used in recruiting and head hunting of personnel; first the top management as well as other staff to work with. So basically for now we are prepared to open our doors to commence full activities effective from January 2016 and what the Internal Revenue Service is out for is to ensure that we block all leakages that used to exist in the old order of revenue collection by using technology and new people to increase the internal revenue generation of Kwara State.

Q: So, what is going to be the relationship between your establishment and the civil service in view of the bureaucracy associated with civil service?
A: The law establishing the Kwara State Internal Revenue Service made it autonomous from the civil service structure. So unlike when the board was under the Ministry of Finance, this new revenue service is autonomous and as the Executive Chairman, I report directly to the Governor of the state. Aside this, we are empowered to recruit our staff, remunerate them and discipline them and to fire them when they err. So the establishment is not under the civil service arrangement, but more of private sector oriented arrangement, and performance driven, so to say. You are well remunerated if you meet your target but if you are not performing, the service is at liberty to dispense with you.

Q: What was the status of the state’s revenue profile under the defunct revenue board?

A: The defunct revenue board as at 2014 was making an average of N600 million in a month, but this year the amount dropped for obvious reasons; the leakages were more and the environment was also very political and so many things were allowed to go because the political arrangement was given priority consideration. But the bottom line is that what was coming into government purse was not commensurate with what was collected as revenue, there was a wide margin. We have it on record that most of what should come to government goes into private pockets and that cannot be allowed to continue, particularly in this era of dwindling revenue from the federal allocation. So everybody has to sit up and every state government has to tighten its loose ends. When you have a revenue sack that is leaking you will discover that what you put in the sack is not what you will meet there. So it is wise to tighten all the loose ends if you really want to generate revenue. So, that is basically what we will be doing in the next one year, to change the process and as well change some of the people doing the collection, change their orientation, provide them with better facilities and look into all those excuses given for inefficiency in the past. These are being taken care of so that there will not be any excuse for non performance. So we are to ensure that all the rates, levies and all taxes come in appropriately. In the past, it wasn’t that Kwarans were not paying their taxes but just that the money was not getting into government coffers, so we are saying enough of that.

Q: For the new Revenue Service, what is your monthly revenue generation projection and how do you intend to sustain it?
A: We are looking at a situation where effective from January 2016 we would make N1 billion a month, particularly in the first quarter and we would progressively move to N1.5 billion in the second quarter because the electronic system being deployed would be tested around this time and would have been perfected within the six months and when we move to third quarter we hope to have moved to N2.5 billion and in the last quarter of the year we expect to have moved to N3 billion monthly, so in all we are looking at N24 billion in 2016, an average of N2 billion monthly but its not as if we should expect that N2 billion from January, it’s a gradual process because we are going to block leakages. We expect that those enjoying the fraudulent leakages would fight back, we know they won’t give in just easily but we know that gradually we will win the war against them and gradually our system will take over from the old system. The moment our system takes over fully, we would have achieved much in the curbing of leakages and would have improved much in performance. So within 2016 we would grow our revenue from N1 billion to N3 billion over time and we believe that after that we can begin to think of increasing the revenue base by bringing in those who were not initially captured in the tax net. By then we would have done enough of data gathering and accommodate those who are supposed to pay tax but were not paying into the system because by then we would have got enough information about them and therefore drag them into the tax net and that would translate to a growth of about 20% annually in whatever monthly revenue that we have before through the new entrants into the tax system.

Q: Are you acting as consultants to the state government on revenue generation?
A: No, this is purely an agency established by law by the Kwara State Government saddled with the task of revenue generation. It is an agency wholly owned and operated by the state government.

Q: Would you employ the services of consultants to boost your operations if need be?
A: Yes, if we so choose to engage the services of consultants we would, because if there are areas where you see value for some of them. Because the fact is we cannot do everything, so in areas where their competence is needed we would engage them provided they are going to help us achieve our set goals. Taking for instance, tax audit in some areas, where we don’t have capacity it’s better to engage the services of consultants. For instance, if banks are not paying what they ought to pay and we need to look into their books, consultants in that field would do better and they would come up with what the banks are expected to pay. Whatever they come up with is what we would now work on in cooperation with consultants and once this is done the consultants are entitled to whatever we agree upon before they start their work with respect to percentage. If we don’t know how to do something it doesn’t then mean that such things cannot be done, those who have the expertise would do it for us and revenue from that area would come in. Also, there are some areas like control posts where consultants have a way they go about it vis a vis the manner of collection there, if it’s what we don’t want to dabble into because we don’t have a perfect process. So in the interim we understudy their process, while we allow them do the job for us. Basically, revenue is diverse and the people who collect it are different sets of people too with varied expertise.

Q: Is there a synergy between the State Revenue Service and the local government revenue system?
A: As it is, Kwara State Internal Revenue Service has the responsibility to mobilise revenue for the entire Kwara State and the local governments are an integral part of the state though they have the autonomy in certain areas. What the state is trying to do is to let the local governments realise the fact that, in their own interest, it is better to cooperate together for collection, so we would collect whatever the local governments should collect because they don’t have the capacity to reinvigorate the collection process by using the appropriate code to ensure that the money gets to them. We are aware of rates and taxes meant for local governments, without appropriate machinery for collection, local governments would not have the revenue come in and it means they would not have enough funds to dispense with their responsibilities; so now that the state government has provided this new platform, there should be some form of working relationship between the local governments and the state to ensure that all revenue accruing to government, local and state, comes in effectively and by so doing both the local government and the state will have sufficient funds with which to execute their projects without anyone breaching the law. So this is being worked out. This will also make us look better organised.

Q: Will this working relationship address the vexed issue of double taxation?
A: Yes, this cooperation will take care of double taxation, because by the time we harmonise all channels of collection, we will make it convenient for the tax payers. We can split their N6,000 payment into N100 per day payable within a stretch of six months. It is after the six months that enforcement starts against defaulters. In essence if the local governments cooperate with us, everyone will benefit from the arrangement. However, those who will not like to cooperate are those benefitting from the leakages in the system.

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