Issues
Maximising Revenue Generation In Rivers
The issue of tax collection and management has been a long drawn one. It has been a popular phenomenon principally among the states and at the federal level. In the early days of tax development in Nigeria, taxes were paid in kind by rendering services such as stone cutting, bush clearing, digging pit toilets or water wells for the benefit of community as a whole. Failure to render such services usually attracted the seizure of the offenders’ properties which then be redeemed by payment of money.
In those days, the Direct Taxation Ordinance No. 4 of 1940 Cap. 54 was promulgated to incorporate the various Native Revenue Ordinances within which framework, taxable income was determined by the warrant chiefs, elders and other persons of influence in each community or district. There were usually native authorities whose native law and custom were recognized and appointed by the governor as tax collectors. This responsibility of appointing tax collection authorities was later extended to the lieutenant governor who could appoint a Divisional or District Council as tax collection authority. This method became outdated invariably due to its low revenue yield, and the system of collection shifted from the village authorities to the Federal Inland Revenue Service (FIRS) which was established to collect taxes for the federal government.
In Rivers State, Internally Generated Revenue administration is undertaken mainly by the State’s Board of Internal Revenue Service (BIRS) established under section 1 (1) of the Board of Internal Revenue Law, Cap. 16, Laws of Rivers State, 1991. Section 1 (2) of the law also created the operational arm of the Board known as the Rivers State Internal Revenue Service (RIRS) in accordance with Section 18 of the law. The Board is accountable to the State Ministry of Finance. Its main functions include the administration of the Personal Income Tax Act, the finance law and any taxes or levies that are brought under the care of the Board; formulate policies that will increase internally generated revenue of the state; indentify sources of revenue available in the state; tax education and similar matters related to effectively generating revenue for government.
Other functions of the Board are to report to the commissioner for finance for policy and fiscal matters; optimum collection of all taxes; enforce penalties stipulated by law, account for such revenues as shall be prescribed by the finance commissioner and make recommendations to the Joint Tax Board (JTB) on tax policies, tax reform, tax legislation, tax treaties, tax exemptions, etc. The Board maintains friendly relationship with corporate bodies and individual tax payers while reminding companies, agencies and individuals that collect income taxes, withholding taxes etc that under the present tax regime they are agents of the board for the collection and remittances of such taxes to government through the board.
The board also reminds tax payers of the penalties consequent upon refusal to remit collected taxes at the expiration of ten days after end of the month.
A critical analysis of revenue profile in Rivers State today shows that the internally generated revenue position is grossly unfair and totally unacceptable to Rivers people.
The RIRS has embarked on restrategising its tax offices towards an efficient tax drive for the government. The service recently kick-started an informal tax drive with the constitution of a 9-member committee comprising representatives of MAN, PHCCIMA, Pillar of Associations, among others to harmonise tax payment and drive the informal sector towards improved tax collection in the state. All these are aimed to block revenue leakages in the system and guide officials of the various tax offices against fraudulent practices. It is also to make the general public be consistent in the payment of their taxes as it is their civic responsibility and not an act of punishment. It is as well a means of improving development in the state.
Of truth, one of the main sources of revenue generation of any country or state is through tax. With the dwindling economy in which the country depends on oil and gas, there is the need for states and the federal government to fashion out ways of diversifying their revenue sources. A member of the tax harmonizing committee, Clement Akininwo, during an interview blamed past governments of Rivers State for the poor tax administration, saying that the harmonization had been delayed. According to him, when the committee’s report is implemented, it will improve the tax system of the state.
The state government, on realizing the shortfall in its tax administration, has swung into action to broaden the revenue base which is seen to be recording impressive result. The state’s revenue standing was less impressive compared to the number of corporate companies in Trans-Amadi Industrial Layout in Port Harcourt, Eleme, Onne, Omoku and other parts of the state, in addition to the number of civil servants, lawyers, medical doctors, traders, businessmen/women and individuals who are taxable and were supposed to pay tax into the government coffers. Rivers State is meant to be buoyant.
It is important to further assert the need for government agencies to closely monitor the activities of tax collectors, consultants or agents and officials of the State Internal Revenue Board, including the designated or authorized banks and other collectors with a view to bringing culprits to book and thus sanitizing the sector.
According to the RIRS, government has banned direct tax collection by officials or agents, rather taxes are to be paid through approved banks. Tax collectors and agents over-inflate taxes and embezzle funds paid by the tax payers which are meant to go into government coffers for development purposes.
Many problems are associated with the operations of revenue generation visa-a-vis tax collection, management and administration. These problems are not only solvable but they run through a single cord or string as the application of one method in any one area produces positive effects on others. The RIRS has been holding series of meetings with different organizations and companies or stakeholders, all geared toward efficient tax collection and improved revenue generation in Rivers State.
The problems associated with the tax system include non-deductions. Some organizations pay their contractors or workers without deducting taxes while some agencies deduct but fail to remit such deductions but rather make use of the funds on the excuse that the relevant tax agencies or authorities have not asked for it.
Application of wrong rates is another problem of tax collection. Wrong rates or under-assessment is often applied, either out of ignorance or honest mistakes or in order to ‘help’ the tax payer whose money is being deducted.
Credit notes or evidence of payment not dispatched, the tax payer would insist that he has paid the tax, while the Board would insist on seeing the documentary evidence since the deduction may have been diverted or paid to the wrong tax authority or person. Incomplete information may lead to writing defective credit notes that may create problems when credit is to be given for the deducted.
In some circumstances, tax collectors are treated as unwelcome guests just as in some situations, several means are devised to evade tax. The tax collectors in other cases, are said to be cruel to the tax payers.
In the 1950s and 1960s, for example, in Nigeria, it was common for tax payers to create several exit routes in their homes as avenues for tax evasion. Today, such exits still exist, but in scientific forms. Government, therefore, must of necessity, block these scientific exists with the appropriate machinery.
Another notorious fact is that in most cases, the Board of Internal Revenue in Rivers State has little or no information on internal revenue pattern/operations and does not know when internally generated revenue is dropping or increasing, so the BIRS has a duty and lots of job to do as the actual number of companies operating in Rivers State is not known as well as other taxable persons. The Manufacturers Association of Nigeria has already indicated its readiness to carry out a registration of all taxable companies operating in the state. This will enable the Board to get the statistics of the companies, get the total outstanding liabilities and post-audit transactions to be able to impose due penalties on defaulting companies.
To maximize revenue generation in the state, tax payers must be made to comply with the law just as the designated or government-approved banks through whom the taxes are paid should be made to remit to the government as at when due.
There is the urgent need to automate the various tax management processes. There should be a data base on tax payers and a comprehensive list of properties for taxation anywhere as well as comprehensive information on companies and their employees. It is now time for the government to formulate appropriate and sustainable programme and policy to tackle the problems associated with tax collection and revenue generation in Rivers State. Government should work out best ways of achieving greater efficiency and effectiveness in its drive for maximum revenue generation, treasury management and control.
There should be a holistic approach to the process of governance to ensure that the ordinary citizens feel the impact of their taxes, while the people should support the government by paying their taxes as at when due. While government should be sincere in utilizing the tax payers’ money on development projects, all the technical staff of the Board of Internal Revenue must brace up for serious revenue administration drive and change their work ethic or culture for effective tax collection and revenue generation.
Okpara wrote in from Port Harcourt.
Shedie Okpara
This is an open letter to the Minister of the Federal Capital Territory, Chief Nyesom Wike.
Your Excellency,
Sir, ordinarily, I would not be writing an open letter to you, but like a wise man once said, “Silence would be Treason.” So I prefer to stay alive than face the consequences of silence in the face of crime. With each passing day, and as the socio-political tides continue to turn, it has become more pertinent that more people speak up in a concerted MANNER to prevent the death of our party, the Peoples Democratic Party (PDP), as we appear to be, in the words of W. B. Yeats, “turning and turning in the widening gyre” heading for an end where the falcon will no longer hear the falconer
It is unfortunate that since losing control of the Federal Government, with the loss of President Goodluck Jonathan at the poll in 2015, our party, the Peoples Democratic Party (PDP), has continued on a downward spiral. It is much more painful, that where it is expected that leaders within the party should rise to the challenge and put an end to this decline of our great party, some have instead taken up roles as its undertaker.
It will be hypocritical to claim aloofness to what I believe is your grouse with the PDP and I am not a hypocrite. It will be uncharitable on my part to discountenance the role you have played in strengthening the PDP from 2015 up until the last Presidential primaries of the party. It is my belief that your grouse against certain members of the party who you perceived worked against the party and abandoned it in 2015 and then came around much later to take control of the party, is justified. Also know that your decision to remain in the Party and stifle its progress on the other hand, as a sort of payback, stands condemned. For a man of your pedigree and stature, it is a dishonorable act, highly dishonorable and stands as testimony against all you claim to stand for.
At least, it can be argued that those who you hold this grudge against, abandoned the party completely and did not sit back while actively working to destroy it from within. But what then can be the argument on your own part, seeing that those you are currently working with against your party are the same people who set in motion, and executed surgically, the plans that not only ended our Party’s leadership at the centre, but ended up dislodging the first Niger Deltan to occupy Aso Rock as Commander in Chief of the Armed Forces. Is this not akin to “cutting off one’s nose to spite one’s face?” That will be worse than folly. Let us not throw away the baby with the bath water because we do not like the soap used in bathing the baby. It will be a grave mistake.
Honourable Minister, sir, it is rather unfortunate that of all people, you have also decided to play the role of an undertaker not only for our party, but for our dear Rivers State.
I will like to take you down memory lane a little. Let me remind you of your emergence as Guber candidate of the PDP in Rivers State, against all fairness and justice in 2014. You will remember that despite the reality being that you as an Ikwerre man was poised to replace a fellow Ikwerre man in Governor Chibuike Rotimi Amaechi in our multiethnic state, Rivers people overwhelmingly stood by you and pushed for your emergence as Executive Governor of Rivers State in 2015. I dare say that your popularity in the entire Niger Delta region was at an all-time high at this point.
I want you to understand why you were loved across board leading to your eventual emergence as Governor of Rivers State in 2015; it was because when it looked like all were against the second term ambitions of the first Niger Delta man to emerge as President of Nigeria, you became not just a pillar but a beacon of resistance by standing for Goodluck Jonathan. Rivers people, as grateful and rewarding as they can be, paid you back by ensuring your electoral victory against the incumbent All Progressives Congress (APC) led by your predecessor. On your emergence, where there were second term Governors in the region, you, a first term Governor, was seen by the people as not just the leader of the PDP, but the leader of the entire Niger Delta region. You earned it, and no one could dispute it.
In 2019, when your re-election bid was being challenged ferociously, Rivers people once again stood solidly behind you. Many were killed in the process of defending your votes. Do you remember Dr. Ferry Gberegbe that was shot and killed while trying to protect your votes in Khana Local Government Area? There are many more unnamed and unrecognised sons and daughters of Rivers State who sacrificed their lives so that you could emerge as a second term Governor of Rivers State.
In 2022/23, Honourable Minister, you oversaw a party primary across board that saw some candidates imprisoned and internal party democracy jettisoned for your wishes, leading to the emergence of flag bearers of our party all singlehandedly picked by you. You have on more than one occasion publicly stated that you paid for all their forms. Even those shortchanged in this process licked their wounds and continued to play their roles as party members to ensure the success of the party at all levels. In what will go down as one of the most keenly contested elections in recent Rivers history, with formidable candidates like Senator Magnus Abe of the Social Democratic Party (SDP), Mr Tonye Cole of the All Progressives Congress (APC), and the vibrant youth driven Labour Party (LP), PDP emerged victorious across board except for Phalga Constituency 1 that was lost to the Labour Party. (Not that you did not loose in some other LGA’s but let’s stick to the official figures declared by INEC).
It begs the question, why then do you want to burn down Rivers State, when everyone who now holds political office emerged through a process designed and endorsed by you? Is it that you do not care about Rivers people and you are all about yourself? If so, I am forced to believe that those around you are not telling you the truth. The truth being that in a state where your words were law; where houses and businesses could be demolished or closed down without any recourse to legalities, where Executive Orders could be deployed to stifle the opposition, that your popularity is now at an all-time low. Probably because they are afraid of you, or of losing the benefits they gain from you, they fail to tell you that what you might perceive as a battle against your successor, has slowly but gradually degenerating into a battle against Rivers State and Rivers people. You know, there is a popular saying that, a man can cook for the community and the community will finish the food, but when a community decides to cook for one man, the reverse is the case.
LEAVE FUBARA ALONE
You have gone on and on about being betrayed by Governor Siminalayi Fubara. You point fingers forgetting that some of those same fingers quick to spot betrayals point straight back at you. It is not Governor Fubara that has betrayed the PDP by working against it in the just concluded General Election, and working with the opposition at the State and Federal level to destabilise the party. It is you, Honourable Minister. It is not Governor Fubara that betrayed Rivers people by instigating a political crisis with propensity to escalate ethnic tensions in Rivers State. It is you Honourable Minister. It is not Governor Fubara that has declared himself God over all in Rivers State and has no qualms with burning the state to the ground to prove a point. It is you Honourable Minister. It is you Honourable Minister who told the world that the APC was a cancer and you can never support a cancerous party. It is you Honourable Minister who ended up facilitating the emergence of the same “cancerous” APC that has accelerated the economic decline of this country and further impoverished our people with no remorse. All so you can be a Minister of the Federal Capital Territory? The lack of self awareness is gobsmacking.
Some days back I came across a video where you talked about death and how you do not cry when you hear about the death of some people because you have no idea what might have caused it considering many a politician swear “over dead bodies” and still go back on their words. Those words made me think, and I could see the reason behind them. You see, in chosing to be God in the affairs of Rivers people, you have closed your eyes and ears to reason; you see nothing and hear nothing that can cause you to rethink on the path you have chosen. In your quest to “show Fubara” you have unwittingly united a vast majority of Rivers people behind him, so much that even those who despised him because of you, now like or love him, because of you too. In your scheming, I will advise you not to forget that “the voice of the people is the voice of God”.
Note that the war which you have or are waging against Governor Fubara, has gone beyond being merely political as you might see in your minds eye. It is now one that, fortunately for some and unfortunately for others, has evolved into a war against Rivers people. It is good to point out that no one has taken a stand against Rivers people and won. No one has gone against God and won. In your defiant characteristic manner, it will be unfortunate if you believe your own hubris and that of those around you on the possibility of you being the first to successfully go against Rivers people. It will be a needless gamble; one where if you win you create more enemies for yourself than you can withstand on your political journey, and if you lose, your legacy becomes an inglorious and irredeemable one in Rivers State, the Niger Delta, and Nigeria at large. For your sake as regards posterity, it is my greatest wish that you have a moment of sobriety and a deep reflection and introspection on this path you have chosen.
Honourable Minister, sir, what is left of your legacy is on the brink of being completely desecrated and relegated to the dustbin of our political history, and it will be a sad end to what I will say has been a wonderful political career that many can only dream of. The ball is in your court, and may God Almighty have mercy on us all and forgive us for our shortcomings.
Gabriel Baritulem Pidomson
Dr Pidomson is former Chief of Staff, Government House, Port Harcourt and former member, Rivers State House of Assembly.
In 2015, I made a conscious decision to invest my financial resources, my time, and energy into supporting Nyesom Wike’s gubernatorial campaign. I poured my heart and soul into ensuring Nyesom Wike emerged victorious even at the risk of my personal safety.
Again in 2019, I doubled down on my commitment. I invested a significant amount of money to procure campaign outfits for all twenty-three Local Governments Areas of Rivers State. I spared no expense in supplementing Wike’s election efforts in my own local government, and once again putting myself at great risk to safeguard the fairness and transparency of the electoral process.
However, despite my unwavering loyalty and sacrifices, I found myself abandoned and forgotten by Wike. Throughout his eight-year tenure, he failed to acknowledge my contributions or fulfill his promises and agreements. Even as a former Deputy Governor, Wike denied me my severance benefit.
My investment in Wike’s governorship was not just financial – it was a commitment of passion, dedication, and belief in a better future for Rivers State. Yet, his leadership style of dishonesty, greed, drunkenness and rash abuse of senior citizens brought me nothing but disappointment, misery and losses.
By the grace of God, today I speak not as a victim, but as a hero. I have accepted my losses, and I have moved on. And as I reflect on my experience, I cannot help but urge Wike to do the same and allow peace and development to reign in Rivers State.
Nyesom Wike, when you speak of investing in Governor Sim Fubara’s election, remember those like me who also invested in you. Remember the sacrifices I made, the risks I took, and the promises and agreements you left unfulfilled.
It is time for you, Wike, to let go of the past and allow Governor Sim Fubara the breathing space he needs to lead Rivers State forward. Allow him to focus on the challenges of good governance and the aspirations of the people. Spare him these unwarranted and ill-conceived political manoeuvrings founded on personal agenda and not for general good of Rivers State and her people.
I may have lost my investment on Wike, but I have not lost hope in the future of Rivers State. And together, we will continue to strive for a brighter tomorrow.
Long Live the Governor to Rivers State, Sir Siminialayi Fubara!
Long Live the Good People of Rivers State!!
Long Live the Federal Republic of Nigeria!!!
Engr Ikuru is former Deputy Governor of Rivers State.
Tele Ikuru
