Tunde Fowler: Tax and role of media

[caption id="attachment_53736" align="alignright" width="611"] Tunde Fowler[/caption] By Tunde Fowler I thank the organisers of this event for the privilege of speaking to a distinguished audience of journalists. Journalists seek the truth; they hold leaders accountable and together with scholar-activists and change agents, they point the course which societies should chart. Investigative journalists belong to a special genre of the journalism profession. This is because they are believed to be more painstaking, rigorous, patriotic and far-sighted. Many perceive investigative journalists as systematic and in-depth practitioners. Their works, many hold, consist of original research and reporting, often involving the unearthing of secrets and hidden facts with social justice, accountability and Common Good as the goals of the work that they do. I thank the founders of the Wole Soyinka Centre for Investigative Journalism for their celebration of our own and only Kongi, the erudite Professor Wole Soyinka, who has remained the conscience of the nation, many times at personal risks, for decades. He hoists the Nigerian and African flag on the global stage. I feel honoured to speak at this distinguished centre. Investigative journalists in Nigeria have a rich past as their works have achieved the following among others: · exposure of the Koko Nuclear Toxic wastes, which compelled Italy to evacuate her cargoes of death from Nigeria; · resignation of a former Speaker elect, Salisu Buhari, following the famous ‘Toronto University’ certificate scandal saga; · the exposure of the dehumanizing work conditions in a Chinese factory in Lagos. In the United States of America, we are all familiar with the Watergate Scandal, which culminated in the resignation of Richard Nixon and the New York Times expose on the Anthrax scare, which the paper claimed, came from mails that originated inside and not outside the US. Two months ago, an in-depth investigative work by the International Consortium of Investigative Journalists’—a global network of more than 190 investigative journalists in more than 65 countries- exposed financial details of tax evasion by offshore firms with a Panama based law firm; Monssack Fonsecca, as the linch pin for the fraud. This expose is of significant importance to Revenue Authorities all over the world, several of which are already putting machinery in place to take advantage of the revelation. FIRS’ EXPERIENCE The FIRS is an agency of the Federal Government saddled with the responsibility to: assess, collect, enforce and account for taxes collected. We do not expend the revenue we collect. The First Schedule of the FIRS Establishment Act (FIRSEA) 2007, empowers the FIRS to collect the following taxes: · Companies Income Tax, · Petroleum Profits Tax, · Personal Income Tax, · Capital Gains Tax, · Value Added Tax, · Stamp Duties, · National Technology Development Levy, In taxation—about which the distinguished former President of the Chartered Institute of Taxation of Nigeria (CITN) Mrs. Adebimpe Balogun, will speak, the end of a tax authority’s efforts are best rendered in figures (collections). That is, how much a tax authority brings into the public till to fund a state or a nation and at a reasonable cost of collection-what accountants call the bottom line. FIRS has not done badly in providing revenue for national development as the table below shows: FIRS Collection 2011-2015 (Trillion) Year OIL REVENUE NON-OIL REVENUE TOTAL 2011 3.071 1.558 4.628 2012 3.201 1.801 5.003 2013 2.667 2.139 4.806 2014 2.454 2.261 4.715 2015 1.290 2.452 3.742 FIRS collection figures from 2011-2015 Source: Revenue Accounting Department, FIRS SOME MILESTONES IN FIRS · In 1943 the Nigerian Inland Revenue Department, was carved out of the Inland Revenue Department of British West Africa and renamed the Federal Board of Inland Revenue under the Income Tax Ordinance No. 39 of 1958. · In 1961 the Companies and Income Tax Act No. 22 of 1961 established the Federal Board of Inland Revenue, FBIR. CITA 1961 and the Body of Appeal Commissioners to resolve disputes between taxpayers and the Board. · The Income Tax Management Act 1961 created the Joint Tax Board (JTB), to ensure uniformity of standards and application of Personal Income Tax in Nigeria. · In 1978, part of the recommendations of the Study Group led by Shehu Musa led to the introduction of the Witholding Tax. · In 1993 the passage of the Finance (Miscellaneous Taxation Provisions) Act No 3 of 1993, Decree 104 of 1993 reviewed the composition of the FBIR and also established the Federal Inland Revenue Service (FIRS) as the operational arm of the FBIR. · In 1993, the Value Added Tax, VAT was introduced. · In 2006, the Bank Collection Agreement and the introduction of Collecting Banks began to stem cash and cheque-based leakages in the FIRS collection process. Collection of cash and cheques in tax offices ceased. Taxpayers started paying into Federation Account through commercial banks, from where it is swept, daily, into the Central Bank of Nigeria, CBN. [caption id="attachment_53736" align="alignright" width="611"] Tunde Fowler[/caption] JTB AND FIRS The JTB is an umbrella body for all State Boards of Internal Revenue Service and the FIRS. Some revenue bodies like the Federal Road Safety Commission are co-opted as members. At the recent JTB meeting in Kano, the need to co-opt the Nigeria Customs Service-a key revenue agency of government, was raised and also approved. The JTB introduced the Unique Taxpayer Identification Number TIN, it did extensive work on presumptive tax and sought ways to stem multiplicity of taxes. TIN will ease data sharing and tracking of taxpayers among states. Today, JTB is tweaking TIN to ensure that it is data-laden and meets the intended objective of its introduction. Under Section 8 (q) of the Federal Inland Revenue Establishment Act 2007, every taxpayer is expected to be issued a TIN in collaboration with State Boards of Internal Revenue and Local Government Councils. In 2007, FIRS gained financial and administrative autonomy when the Federal Inland Revenue Service (Establishment) Act 2007 was passed into law by the National Assembly. Some of the changes that occurred in the tax system since then include collaboration with stakeholders to produce the National Tax Policy, financial and administrative autonomy, dispute resolution mechanism with the introduction of the Tax Appeal Tribunal by the Ministry of Finance and refund mechanism for taxpayers. Other changes include: · Electronic payment initiatives such as e-tax pay, Pay Direct, Remitta to enable taxpayers pay taxes anytime at the comfort and convenience of their offices or home; · Integrated Tax Administration System (ITAS) has rolled out in key offices in Lagos and Abuja. Key corporates are e-filing their tax returns without intervention by FIRS officials. ITAS will automate risk-profiling, taxpayer education, calculation of arrears, interests and penalties and enhance revenue, thus limiting human intervention, as much as possible, in tax administration thereby engendering transparency. GIFMIS: FIRS is collaborating with the Office of the Accountant General of the Federation to collect Value Added Tax, VAT and Withholding Tax WHT from government contractors/suppliers at the point of payment, through the Government Integrated Financial Management Information Systems (GIFMIS). · VAT Auto-Collect is an initiative to ensure that tax is deducted, automatically at source, on transactions that are liable to VAT. This is currently being implemented in the aviation sector. Other sectors like telecoms, e-commerce and power utilities are scheduled to come on board soon. Tax is not just about collection of revenue. Tax, a compulsory levy imposed by government on citizens, is also an income redistribution tool. It is used to streamline consumption and to promote investment. It stokes citizens’ interest in accountability and transparency and compels citizens to hold governments accountable. Since tax is money from peoples’ pocket, it follows that people are interested in what government does with their money. CURRENT STRIDES FIRS has a target of N4.957 trillion in 2016. It is a tough target. But we are committed to achieve this through the following strategies in addition to the ones stated above: · Collaboration with agencies of federal and state governments on taxpayer education, data sharing and joint audit. · FEETT: (Federal Engagement and Enlightenment Tax Teams) is engaging, educating and registering new taxpayers. We are on the streets telling taxpayers what they are to do. The FIRS is also running campaigns in English, Pidgin English and three Nigerian languages: Hausa, Igbo and Yoruba. · Additional taxpayers: We have added over 700,000 new taxpayers to the FIRS database within the last 9 months. · Fast track Audit: We are fast tracking audit of several oil and gas related companies and other key sectors of the economy and collaborating with consultants and accountants for data gathering. · Enforcement: We are empowered by law to enforce payment of taxes, where other compliance tools have failed to yield the desired results. We do enforce payment of taxes on big but recalcitrant taxpayers and known names as you would have noticed in the last two months. WHAT IS THE ROLE OF THE MEDIA IN THE MIX? The media has been one of the major stakeholders and partners of the FIRS. The media has demonstrated understanding in reporting FIRS’ progress and tax issues in general. I will not say the media has been generous, but the media it has been understanding. For this, the FIRS is grateful. The media: (print, TV, radio and online), has played pivotal roles in taxpayer education and enlightenment, law amendment and judicial process and enforcement. FIRS RELATIONSHIP WITH THE MEDIA We believe tax collection is about nation building because the taxes that we collect enable politicians to realize the lofty promises at elections. Tax also promotes socio-economic order. Without sustainable revenue, the whole business of nation building and social engineering, growth and development is wishful thinking. The FIRS wants the media to understand what the Service is doing. This has informed the FIRS Communication approach comprising, among others: · Periodic public communication by the FIRS Executive Chairman -the Chief Spokesperson of the Organisation. He speaks at key public events. It is not an accident. Such public engagements are key communication windows; · Establishment of Communication and Taxpayer Education Departments; · Open access to journalists including media interviews, press releases and response to media enquiries; · Posting of FIRS collection, laws, processes and Frequently Asked Questions, (FAQs) and information on the FIRS website: www.firs.gov.ng. We are beginning to embrace social media (Twitter Youtube, Instagram, facebook) · Publication of the Gauge —FIRS quarterly magazine; · Hosting of TV/Radio programmes on FIRS programmes and activities · Stakeholder engagement events (conferences, seminars, workshops) [caption id="attachment_53736" align="alignright" width="611"] Tunde Fowler[/caption] HOW CAN THE MEDIA/INVESTIGATIVE JOURNALISTS DO MORE? The media could do more in tax reporting and assist the nation in attaining what activists, historians and journalists call Nigeria’s Manifest Destiny. 1. In-depth analysis of news and information on tax, economy and finance. Reporters are enjoined to acquaint themselves more with the business of taxation. Like the popular CNN line: You are what you know, and in education others, you cannot give what you don‘t have. Investigative journalists are enjoined to deepen their understanding and reporting of taxation: (Tax laws, tax policy, tax law amendment process, tax administration, tax jurisdictions, investigation, tax practice, transfer pricing and mispricing, Double Taxation Agreements, Tax treaties). In short, tax reporters must know as much as tax practitioners. 2. Balanced stories: We call for balanced, fair and objective reporting of tax issues. Our doors are always opened. 3. Tax Reporters: It is open to debate, if we have tax reporters in Nigeria today—the same way you will refer to Oil and Gas/Judicial/Capital/Money market, sport reporters. For a sector that contributes, annually, an average of N4 trillion to the Federation Account in the last five years, the emergence of a distinct crop of journalists-devoted solely to tax reporting is long overdue. We look forward to the day when a Nigerian tax reporter will enjoy the status of Dr. Sanjay Gupta—who reports health for CNN. FIRS will be willing and ready to support the cause of such group whenever it is initiated. 4. Scrutiny of Corporate Social Responsibility, (CSR) claims of corporates 5. Data Journalism: With what was first called Computer Assisted Reporting, CAR, in the late 1970s, by Professor Philip Meyer of the University of North Carolina in the USA, we now have online collaboration amongst and between consortia of investigative journalists. Today, journalists could harness tons of data to establish a pattern, combust untruths, match data across industries, companies and borders. It might yet be morning on creation day. For all the laudable feats that investigative journalists have attained in Nigeria, we just might be on the verge of a new age of tax reporting with investigative reporters and tax authorities building partnerships that could ensure corporate and individuals do their duty to their nation and humanity by paying their taxes. 6. You stand on the shoulders of giants. Today, it is a badge of honour to stand up and be counted as an investigative journalist. You stand on the shoulders of many, who laid down their lives so you may practice your profession: people like Dele Giwa, Bagauda Kaltho, Tayo Awotunsin, Krees Imodibie and others who died in the course of duty: whose stories/books have not been told or written in all their ramifications. I encourage you all to take their achievements to the next level. 7. Journalists must be good taxpayers and I challenge corporates and individuals to pay their taxes. I believe everyone in this hall pays his or her taxes or either work for or own companies that pay their taxes. Be a patriot. Pay your taxes. Like we say in FIRS, ‘“It pays to pay your tax”. Being a paper presentation by Tunde Fowler, Executive Chairman, Federal Inland Revenue Service at the 8th Wole Soyinka Centre Media Lecture Series on Wednesday 13th July 2016 at NECA building, Agidingbi, Ikeja, Lagos