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Fowler: Peak performer

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Babatunde Fowler


During the 70s when the petro-dollars were flowing into our treasury like rain during the rainy season, our leaders reportedly said that money was not our problem. The only problem was how to spend it. We simply went beserk, establishing all kinds of phantom projects, paying salaries of civil servants in the Carribeans and awarding our public servants a humongous salary bonanza which came to be called Udoji Awards.

Since the oil was gushing and the treasury was brimful we did not, as a people, really pay much attention to other sources of revenue including taxes. During the 1979 presidential elections two of the candidates, Dr. Nnamdi Azikiwe of the NPP and Mallam Aminu Kanu of the PRP were disqualified by the Federal Electoral Commission (FEDECO) for not paying their taxes “as and when due.” They were also accused of paying just peanuts on the eve of the election so as to satisfy the requirements for the contest. They sought redress in court and were cleared to join the fray. That was an indication that even the high and mighty did not seriously consider paying tax as an obligation to be voluntarily discharged. Not just that, our governments did not bother themselves about the problems of tax avoidance and evasion. They just spent whatever money was available from crude oil.

However, over the years the oil industry has suffered from some cyclical instability and low pricing due to a number of factors which need not detain us here. It then occurred to some of our governments that it was wise to look beyond the Federal allocation that came from oil. One of the governments that made the first serious move towards raking in money from taxes was the Lagos State Government under Governor Bola Tinubu. Let’s give it to him, Tinubu has a good eye for locating talent. He found a man who came to be recognized as a tax wizard and brought him as the Chief Tax Officer of his government. His name: Babatunde Fowler. In 1999, the revenue from Lagos State Inland Revenue Service was a paltry N600 million. Fowler proposed some wide-ranging reforms on taxation, broadened the tax base and improved the collection procedure thus establishing an efficient tax template for Lagos State.

By 2015 Lagos State was raking in N20 billion. Pure majic! Anyone who wants to be cynical can say that Lagos has enormous potential for scooping funds from various sources. Yes, but it takes a brilliant, creative and efficient professional to deliver in matters of taxation. No one likes the taxman because he is one person who takes money out of your pocket. No one likes to pay tax voluntarily. As individuals we may hate the taxman but society needs him because it is taxes generated by the taxman that brings societal development if and when judiciously utilised. Tax and development are like the egg and chicken story: which one comes first? Some people may say, in response to the request for tax payment that “we haven’t seen any development, that the roads are bad so why should we pay tax.” But the truth is that if you do not pay tax the roads may continue to be bad. It is the Lagos State Government that I can confirm as being one government that establishes in the minds of its residents the nexus between tax and development.

It has signboards at worksites that say something like “your tax is working for you. We are fixing your road.” Many people in Nigeria do not believe in paying tax or they do not see or know what is being done with the tax collected or they believe that the money is often dumped in the pockets of some corrupt officials. Some of our governments have had to attach the payment of tax to the enjoyment of certain public amenities such as enrolment of children in public schools. Even then most people still find a way of dodging their responsibility. It takes the skill, dedication and creativity of the taxman to increase the taxable base so as to bring more people into the tax net. Secondly, he has to increase the effectiveness of the collection process so as to reduce the number of people who wish to avoid or evade tax payment. Jean Baptist Colbert, a renowned economist and Minister of Finance under King Louis XIV of France (1619-1683) had stated that: “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

Part of the reason for low tax collection apart from the ones earlier given is that the internal revenue departments are either poorly staffed or poorly equipped or poorly motivated or they have no access or facilities for gathering accurate data on the assessment of tax liability. I have no idea how well staffed or well-equipped the Federal Inland Revenue Service is but from available records Mr. Babatunde Fowler, its current Chairman, appears to have done a great job. When he was appointed in August 2015 the FIRS was able to rake in N3.2 trillion but by 2018 he had pushed the figure to a magnificent N5.3 trillion. In 2015 it was discovered that there were some 6772 accounts with banks balances of between N1 billion and N5 billion whose owners filed no tax returns. They have now been brought into the tax net. In tax matters the non-oil sector used to fall behind but from the N5.3 trillion overall collection of 2018, about N2.852 trillion, more than 50%, came from the non-oil sector. In the property market FIRS was able to generate N1.3 billion in 2017. In 2018 it increased its haul to N2.88 billion. It is likely that it is this commendable performance that must have prompted the United Nations Secretary General, Mr. Anthonio Guterres to appoint him as a member of the International Experts Committee on Tax Matters in 2017. In the same manner his colleagues in the African Tax Administrators Forum have bestowed on him the leadership of their organisation for two consecutive terms. That is an acknowledgement of Nigeria’s leading role in the difficult terrain called taxation.

Nigeria is at a difficult point in the management of its financial problems now. The Director General of the Debt Management Office (DMO) Ms Patience Oniha said on November 22, 2019 that Nigeria’s total debt profile is about N25.7 trillion as at June 2019. She told the House of Representatives Committee on Public Accounts that the debt is owed by Federal and State Governments and FCT. However, 80% of it is owed by the Federal Government. This problem is compounded by other excruciating problems such as low income from oil and non-oil sources, high debt servicing charge, high budget deficit, weak naira, low productivity, new minimum wage, poor security, poor electricity which affects manufacturing, high unemployment and extreme poverty. All of these are likely to compound our economic problems in the months ahead. In the short run we are not likely to substantially increase our revenue intake from oil or solid minerals when we have not been able to deal sufficiently with crude oil theft, bunkering, pipeline vandalisation and the theft of solid minerals by illegal miners. We will have to rely more, for revenue, on such institutions as JAMB, NIMASA, Customs and FIRS. These are institutions which, in my opinion, are run with a high degree of efficiency and transparency.

Professor Ishaq Oloyede, JAMB Registrar has turned the institution into an efficient money-making machine apart from tackling the fraudsters in that system. Dr. Dakuku Peterside has dug NIMASA out of the deep hole into which his predecessor had put that institution and has now placed it in a position of reckoning with similar institutions abroad. Mr. Hameed Ali, the Comptroller General of Customs has by the use of strong-arm tactics been able to gather for the Federal Government monies that could have disappeared into thin air. People may object to his methods but he delivers.

My advice to him is to use the opportunity of the land border closure to plug existing loopholes since he knows that the borders cannot be closed forever. I rank Oloyede, Peterside, Ali and Fowler as peak performers in the Buhari government. One of the component parts of what has come to be known as the “Nigerian factor” is the P.H.D (pull him down) pseudo-syndrome. In Nigeria positions in government are seen as honey pots in which case even if a holder of that office is performing optimally, those who eye the coveted office must rake up reasons to push for his removal irrespective of his performance. In other words, people may campaign for even a performing official to be changed just for change sake or to satisfy the inordinate ambition of those eyeing the office. Or it may be either ethnically or politically motivated. Or it may just happen that some officials may not want the government in which they serve to succeed. It may sound strange but it is true.

Let me give you an example. A few years ago one of the State Governments asked me to invite knowledgeable people in various disciplines whose ideas could improve its internally generated revenue. The Governor asked for a proposal. I submitted it and he promptly approved it. The proposal got missing for six months. The day he got angry over the missing proposal it resurfaced. He directed me to go and discuss the details with the Commissioner for Finance and Permanent Secretary. My proposal included the publication of the seminar’s proceedings in one handy volume as a book. The Permanent Secretary cancelled the book component and replaced it with decoration of the seminar hall. I asked her “why do you want to decorate a lecture hall?” She said: “we always do decoration.” To her, decoration was more important than a book. She must have had a standing and fruitful deal with decorators and none with book publishers.

My advice to President Muhammadu Buhari is to seek to leave behind a worthwhile legacy of accomplishments now that he has been confirmed for a second term. The only way to achieve that is to not allow political predators and flunkeys to ease out, for selfish reasons, people who have added great value to his achievements. I believe Babatunde Fowler will be numbered among them if fairness is a criterion.


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