By Giovanni Emephia
There is no doubt that the year 2020 will remain indelible in the minds of many for its tsunamic disruption to the economic fortunes of countries the world over, businesses and individuals alike. Since the great economic depression of the 1930s, no singular occurrence has affected people globally like the corona virus pandemic, which has rendered countries either bankrupt, thrown them into economic recession or ruined the livelihoods of millions of people around the world.
The year 2020 began fair enough just like any other but the hydra-headed monster, coronavirus, reared its head and caught up with a world unprepared for its lethal onslaught by surprise. As at the time of writing this piece, the world’s largest economy and most technologically advanced nation, the United States of America, had been practically brought to its knees by recording more than three hundred thousand deaths and almost 18 million cases of COVID-19 infections with, at a point, 150,000 new infections per day.
Worst hit around the world have been small businesses which have gone under, millions of jobs lost and citizens living either in abject poverty or facing the threat of penury and despair.
It is no news that the fragile Nigerian economy has again slipped into a second recession, raising fears of large-scale economic worries for many. This dire situation hits home of millions of Nigerians who depend on, and expect their governments at all levels to continue to provide basic services required to enable them live at least a modicum of a stable life. And when you add the destruction of public facilities and infrastructure by hijackers of the #EndSARS protests across the country recently, the economic picture is gloomy, indeed.
And this is the classic example of the tax man’s greatest nightmare: How do you proceed with tax administration in an environment such as this?
However, despite the daunting challenges, one cannot but see that the survival of our state, the ability of government to exist and claim legitimacy, ultimately lies in its ability to perform its statutory functions of providing security, and creating the enabling environment for citizens to thrive and sustain themselves and their families. The alternative would be an invitation to chaos and a breakdown of law and order.
It is no longer in doubt that Nigeria’s over-dependence on oil has proven, over time, to be unviable, undependable and unsustainable. Over the years, it has become more obvious that taxes are the most sustainable sources of funds for government to carry out its basic function of providing security, healthcare, education, social services and infrastructural development which are the building blocks of development in any given society.
With these in mind, therefore, one can fully appreciate that the reality that stares us in the face as a people is one that requires specific, strategic and co-operative action on the part of, not only the state government, but the citizens at large. It is against this backdrop that the recent signing into law of the Delta State Internal Revenue Service Law 2020 provides an improved legal framework for the restructuring of the operations of the Delta State Internal Revenue Service to cope with the demands of a COVID-19 economic era and develop a more professional, strategic and technology-driven approach to revenue generation in Delta State.
The new law which grants quasi-autonomous powers to the revenue service in line with global best practices, confers on the service the sole authority on issues of revenue generation in Delta State. All revenue generating ministries, agencies and departments (MDAs) are now mandated to follow the lead of the revenue service by ensuring that all returns on all revenue collected by them are promptly made.
The law also confers on the service the power to “appoint, promote, transfer and impose disciplinary measures on the staff of the service”, a responsibility formerly exercised by the Delta State Civil Service Commission and the Head of Service of Delta State. This quasi-autonomous nature will enable the management of the service to have direct control over its workforce and efficiently apply them in a way that enhances greater productivity.
This restructuring process became necessary as a strategic response to the multitude of challenges in terms of control over staff, having the best suited and professionally qualified people to manage the tax process, application of technology to simplify tax administration, as well as, ensuring that every possible source of alternative revenue is explored and exploited in a professional, effective and efficient manner for the development of the state.
In order to realize this vision and the objectives of the service which centre on increased and sustainable revenue generation, a phased strategic road map has been developed by the management of the service, led by Sir Monday John Onyeme.
The Road Map which covers the period from 2020-2023 has the following strategic goals:
- To achieve a revenue collection increase of at least 20% in fiscal 2021, and 15% in subsequent years.
- To increase tax payer registration by at least 50% annually.
- To achieve a voluntary tax compliance rate of 60% annually.
- To reduce tax arrears and unremitted tax deductions at source by 60% at the end of 2021.
- To ensure that at least 60% of registered tax payers receive tax information leaflets once a year.
- To ensure that every staff of the service receives at least 100 hours of training annually,
To be able to achieve these goals, and according to Sir Monday Onyeme, the Delta State Internal Revenue Service has “designed a new organizational structure that provides a one-stop shop for all tax payers that is typical of a tax authority, and is supported by modernized work processes and a corporate culture founded on the core values of service. The chairman also explained that “the organizational structure would be segmented into headquarters and field offices in order to ensure adequate coverage and attainable span of control.”
The features of the new organizational structure which seeks to improve on service delivery, resulting in efficiency and effectiveness in its operations, include:
- Separation of powers to engender checks and balances.
- Standardization of practices and ensuring the transparency of work flows and progresses across tax offices as to elicit tax payer’s confidence.
- Ensuring that headquarters management and staff focus on the development of operational policies, processes and procedures, and strict monitoring of field offices’ operations using appropriate performance indicators so as to detect corporate risks and proffer timely solutions.
- Ensuring that field offices handle day-to-day tax administration duties in a transparent manner.
- Clear line of reporting and information dissemination to all officers of the service.
- The creation of tax payers’ service units in tax offices to cater for the needs of tax payers in a manner that demonstrates to the taxpayer that he/she is the essence of the business of the service. This will also include tax compliance enforcement measures that will elicit voluntary tax compliance.
- The integration of various revenue/tax functions for synergy, ease of data matching, information sharing, cost efficiency and convenience of tax payers.
In addition to these measures, the revenue service is working with technical partners for the implementation of the Integrated Revenue Administration Suite, IRAS, which is the gamut of technological applications that include the following:
- Tax Smart: An application currently used for assessment, and the issuance of assessment notices and tax clearance certificates to taxpayers (Direct Assessment/Self-employed and public servants) from field offices of the service. Pay as You Earn Tax Clearance Certificate for those in the private sector is processed centrally from the headquarters.
- Central MDA Billing System (CMBS) is currently being used to generate assessment of rates, levies, fees and charges from the various MDAs for the harmonized demand notices being issued by the revenue service;
iii. The Revenue Dashboard is the viewing platform which enables the real-time monitoring of in-coming revenue receipts from different sub-units, and it is currently in use.
- The Delta Revenue Mobile is an android application for mobile authorization of revenue receipts called “smart receipts”, and tax clearance certificates issued by the Delta State Government.
In addition to these innovations and the restructuring of administration process, there are plans to ramp up tax education/enlightenment activities across the state for the purpose of generating enough awareness in the public on the processes of taxation, the role of citizens in it, benefits of taxation in terms of showing citizens what government does with tax revenue, and the consequences of tax evasion, both to the society at large and to the tax evader.
It is believed that a deliberate, professional and strategic communication engagement with the public, in addition to other public relation strategies will go a long way in building and sustaining tax-payer confidence in government and encourage voluntary compliance by tax payers.
In conclusion, then, the implementation of these strategies is for the sole purpose of ensuring that the long-term planning, creativity and consistency in policy implementation become a culture and the substructure of revenue generation activities in Delta State. The “new normal” requires nothing less.
This position is further echoed in a keynote address delivered by Mrs. Zainab Ahmed, the Minister of Finance, Budget and National Planning, at the Sixth Annual Internally Generated Revenue Peer Learning Event organized by the Nigeria Governors Forum (NGF) in Abuja on the 14th December, 2020 when she said: “Considering the impact of COVID-19, the revenue outlook for 2021 depends on the willingness of state governments to embrace the right tools, technology and the strategies to transform, enhance and strengthen revenue growth and sustainability and adopt cost-optimization plans.
