If ever he was in doubt, it should be clear to Dr Babatunde Fowler by now that extraordinary courage is needed to push through new ideas where vested interests are deeply entrenched. As the architect of the reforms that grew the IGR (internally generated revenue) of Lagos from an average of N600 million in 1999 to well over N25 billion by 2015, perhaps this tax guru did not have to worry much about political risks and distractions back in his last station. Working for an administration that was in the opposition then, the shield mustered by the government in Alausa was certainly broad enough to protect its key enablers against the snares of the enemy.
But the Federal Inland Revenue Service in Abuja is a bigger platform and so is the burden the occupant of the office has to bear. Attack is not only inevitable but often fierce also. Various schemes are floated to either slander or distract you. Especially when actions or steps undertaken by you knowingly or inadvertently hurt some folks. Well, it does not matter even if that helps public interest ultimately.
Dr Babatunde Fowler
Today, even the worst critics cannot but acknowledge that the innovative measures embarked upon by Fowler have helped to reposition the FIRS for better results. From the N3.3 trillion generated in 2016, the returns posted by FIRS in 2018 was a record N5.3 trillion, representing a growth of 53 percent within three years. As for 2017, the figure generated was N4 trillion. This is significant because it came at a time when the national economy was supposed to be contracting as a result of the recession that befell the country in 2014/2015, widely considered the worse the nation ever experienced in a generation following a steep crash in commodity prices in the global market.
So, it would not be wrong to credit the FIRS as helping to generate revenue that enabled the country weather that recessionary storm without any oil windfall of any kind. As a matter of fact, oil price crashed to less than $30 at some point.
But the FIRS’ revenue turnaround was not achieved without Fowler taking some hard decisions on assumption of office which understandably did not go down well with some folks. He did not have to reinvent the wheel though; just the application of commonsense. Of course, the elementary lesson you learn in management class is to always seek to attack cost with a view to maximizing returns.
Just one example of what Fowler did to cut down the cost of operations drastically. Before he took over, the practice was for a lump sum to be made available for the heads of several dozens of FIRS stations across the country. Of course, such system was susceptible to abuse.
Instead, a more transparent inventory process was enshrined such that operatives are now required to sign off a voucher to have their operational vehicles fuelled at designated gas stations across the country. Such approved filling stations will, in turn, file claims directly to the FIRS for payment monthly.
With time, the heavy costs incurred in the past in the name of operations were drastically cut down, thus curtailing abuse. In fact, the costs fell by more than 60 percent! Smart dudes no longer received a lump sum of money monthly over which they had discretion to spend on petrol and diesel. Of course, the bulk of that actually ended up in private pockets.
The massive automation of the FIRS processes has also ensured that sharp practices of the past were curtailed if not totally eliminated. Unlike the manual situation that was overly cumbersome, taxpayers can now discharge their civic responsibility seamlessly through e-Stamping, e-Registration, e-Filing, e-Payment, e-Receipt and e-TCC.
Indeed, overall, at no time in our history has the drive for tax revenue been this aggressive to the extent that “unconventional” steps are being taken to bring the rich and the powerful into the tax net. Nigeria is undoubtedly one of the few countries with several billionaires who engage in conspicuous consumption and yet are unwilling to pay tax. They throw big parties, dwell in wondrous mansions and show off high-end automobiles or private jets, but suddenly become shy when asked to show evidence of paying tax.
Of course, such powerful individuals don’t find this funny and so will not stop at anything to get back at anyone perceived as “poking his/her nose” into their “privacy”.
Working with relevant government agencies like Nigeria Inter-Bank Settlement System, NIBSS, Nigeria Identity Management Commission, NIMC, Corporate Affairs Commission, CAC and Federal Road Safety Commission, FRSC, the FIRS has been able to develop a massive database with information to enable it bring into the tax net millions more of such high net-worth individuals and corporate citizens.
There is no gainsaying the fact that taxation offers a more sustainable template for mobilising resources to fund national growth and development. From the 10 million mark in 2016, the management under Fowler has been able to push FIRS to double the number within three years. Through an aggressive administration of TIN (Tax Identification Number) scheme, it is projected that the figure will hit 45 million in the next couple of years.
Leveraging on the National Tax Data Base, FIRS was able to unveil thousands of bank accounts with turn-over in billions of naira without any proof of paying a kobo as tax. But our super rich dare not try that elsewhere, particularly in the Western countries. The consequence of tax evasion is jail term. Yet, they are quick to lament poor social amenities in the country, as if tax is not what is used to provide such in the first place.
But the good news is that, through engagement, the service has been able to reach an understanding with the some of the account-holders on what to be paying henceforth on a sustainable basis. Efforts are continuing to persuade many more.
In summary, it is only by sustaining this bouquet of reforms that the nation can achieve her dream of sustainable revenue base beyond oil.
*Dr. Sanusi, an economist, wrote from Abuja.
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